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Republicans Propose Three Month Debt Ceiling Increase

Congressional Republicans have announced that they will agree to increase the debt ceiling, but it comes with some strings attached:

WASHINGTON — Backing down from their hard-line stance, House Republicans said Friday that they would agree to lift the federal government’s statutory borrowing limit for three months, with a requirement that both chambers of Congress pass a budget in that time to clear the way for negotiations on long-term deficit reduction.

The agreement, reached in closed-door negotiations at a party retreat in Williamsburg, Va., was a tactical retreat for House Republicans, who were increasingly isolated in their refusal to lift the debt ceiling. Speaker John A. Boehner of Ohio had previously said he would raise it only if paired with immediate spending cuts of equivalent value.

The decision by Republicans seemed to significantly reduce the threat of a federal government default in coming weeks and was welcomed by Senate Democrats. The House will consider the plan next week.

“It is reassuring to see Republicans beginning to back off their threat to hold our economy hostage,” said Adam Jentleson, a spokesman for Senator Harry Reid of Nevada, the majority leader. “If the House can pass a clean debt ceiling increase to avoid default and allow the United States to meet its existing obligations, we will be happy to consider it. As President Obama has said, this issue is too important to middle-class families’ economic security to use as a ploy for collecting a ransom. We have an obligation to pay the bills we have already incurred — bills for which many House Republicans voted.”

The Republicans’ new tack is designed to start a more orderly negotiation with Mr. Obama and Senate Democrats on bipartisan ways to shrink the government’s trillion-dollar deficit. To add muscle to their efforts to bring Senate Democrats to the table, House Republicans will include a provision in the debt ceiling legislation that says lawmakers will not be paid if they do not pass a budget blueprint.

“The Democratic-controlled Senate has failed to pass a budget for four years. That is a shameful run that needs to end, this year,” Mr. Boehner said in a statement from Williamsburg. “We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem.”

The decision represents a victory — at least for now — for Mr. Obama, who has said for months that he will not negotiate budget cuts under the threat of a debt default. By punting that threat into the spring, budget negotiations instead will center on two other points of leverage: March 1, when $1 trillion in across-the-board military and domestic cuts are set to begin, and March 27, when a stopgap law financing the government will expire.

Mr. Obama will unveil his own 10-year budget plan in February, laying out his tax and spending plans for his second term. But Senate Democrats, for the past four years, have refused to move a budget blueprint to the Senate floor, in violation of the 1974 budget act that laid out new rules for controlling federal deficits.

House Republicans, for the past two years, have approved sweeping budget plans that would fundamentally remake Medicare and Medicaid, sharply reduce domestic spending, increase defense spending and order a wholesale rewriting of the federal tax code. But without Senate negotiating partners, those plans, written by Representative Paul D. Ryan of Wisconsin, the Republicans’ last vice-presidential nominee, have been more political statement than legislative program.

House Republican leadership aides said Friday that by trying to force Senate Democrats’ hands, Mr. Boehner hoped to move budget talks from ad hoc negotiations between Congressional leaders and the White House to a more orderly process.

“This is the first step to get on the right track, reduce our deficit and get focused on creating better living conditions for our families and children. It’s time to come together and get to work,” said Representative Eric Cantor of Virginia, the House majority leader.

Politically, this is a fairly smart move for the GOP, and that’s not something I’ve said very often when it  comes to the way they handle these fiscal standoffs with the Senate and the White House. As I’ve noted before, they were in a no-win situation on a pure debt ceiling vote. The President had made  clear that he wasn’t going to negotiate, and nobody outside of the extremes of the Tea Party actually believed that Republicans would let the country get to the point where we actually went over the “debt ceiling cliff.” Indeed, as this week went on, more and more Republican leaders in Congress were stepping forward and pretty much admitting that the party was not going to allow that to happen, and that they instead preferred their budget battle to be focused on the Sequestration cuts and the expiration of the Fiscal Year 2013 Continuing Resolution coming up in 2013.

Will it work? That remains to be seen. Now that the GOP has essentially surrendered on the fundamental idea of raising the debt ceiling, the Obama Administration may feel like it’s in a position to push for further concessions. That may seem like a good idea at first glance, but as we head into the budget battles in March, it’s the House that holds the purse strings and the GOP is going to be in a far better bargaining position.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Tony W says:

    Kickin’ the can down the road – although at some level all legislation does this

    Like or Dislike: Thumb up 0 Thumb down 0

  2. Tsar Nicholas says:

    Ah, the liberal wire and print media. You can’t even blink at the fact that it takes until the 8th full graf before you get to the money quote:

    But Senate Democrats, for the past four years, have refused to move a budget blueprint to the Senate floor, in violation of the 1974 budget act that laid out new rules for controlling

    Uh, yeah. What percentage of Zombieland do you suppose even is aware of that “minor” fact? Five percent? Two percent? Zero point two percent? Geez.

    In any case, obviously this move makes sense. For all the flak he gets from the cocooned and inexperienced chattering classes, Boehner actually is a smart guy with real skills. He’s just saddled with bad demographics at the fringes of his own caucus, is all.

    Hard to believe that Reid actually will move forward on a budget, however. Reid is a vicious partisan hack in the mold of Daschle and Mitchell and he actually gets off on the notion of his own power. He might look like a tax accountant, but you don’t get anywhere in Las Vegas politico circles without a trace of Tammany Hall in your veins.

    In the end the GOP will cave. And Team Obama will cave too. Because they’ve caved at every prior turn. But substantively there won’t be anything other than a kick the can moment. We’d need radical reforms to tackle this budget disaster with which we’re saddled. That’s no longer possible, though, in the post-derangment syndrome political universe. If the U.S. were a business it’d be placed into receivership.

    Like or Dislike: Thumb up 1 Thumb down 13

  3. C. Clavin says:

    Do away with the filibuster…then a budget can pass.
    Boehners caucus is irrelevant.
    Has any caucus ever been more irrelevant?
    This is getting comical.

    Like or Dislike: Thumb up 9 Thumb down 0

  4. Stonetools says:

    I think the House Republicans looked into the abyss and realized that the country was going to crucify them if they pushed the government into a shutdown .
    Well played, Obama. You backed them down without resorting to extreme measures, which frankly I thought might have been needed. Some great messaging and some backbone and nerve won the day.

    Like or Dislike: Thumb up 13 Thumb down 0

  5. bk says:

    @Tsar Nicholas:

    you don’t get anywhere in Las Vegas politico circles without a trace of Tammany Hall in your veins.

    I have lived in Las Vegas for years. You obviously don’t know dick about Las Vegas politics.

    Like or Dislike: Thumb up 9 Thumb down 1

  6. Just Me says:

    Do away with the filibuster…then a budget can pass.

    You do realize that budgets aren’t subject to filibuster right? The democrats weren’t failing in their duty out of fear of filibuster but because they didn’t want to lower spending from the levels in the 2009 budget.

    I think this is a smart way to handle the debt ceiling. There is no default and puts the ball in the senate’s court-the house will, like its previous years, pass a budget. It will be interesting to see if the senate follows through on the budget.

    I suspect when it comes to actual negotiations over spending cuts that the GOP will cave-and there will be few if any cuts, but it will be nice to see congress actually pass a budget.

    Like or Dislike: Thumb up 1 Thumb down 3

  7. Davebo says:

    @Just Me:

    You do realize that budgets aren’t subject to filibuster right?

    Err… Yes and no.

    It’s true that you cannot filibuster a budget resolution in the Senate, because the Budget Act provides special rules for consideration of a budget resolution, including a time limit on debate. So the Senate can pass a resolution with only a majority vote. However, the resolution does not take effect when the Senate passes it. It takes effect in one of two ways: if the House and Senate pass an identical resolution, usually in the form of a conference report; or if the Senate passes a separate Senate Resolution (as opposed to a concurrent resolution, which is what a budget resolution is) that says the House is “deemed” to have agreed to the budget resolution passed by the Senate. But there are no special procedures for the simple Senate Resolution required by this second, “deeming” process, so it is subject to the unlimited debate allowed on almost everything in the Senate. If you do not have the support of 60 Senators to invoke cloture and end a filibuster, or prevent a filibuster from even starting (because everyone knows 60 Senators support cloture), you cannot pass such a deeming resolution in the Senate.

    A filibuster by any other name is still essentially a filibuster.

    Like or Dislike: Thumb up 10 Thumb down 0

  8. Ben Wolf says:

    The appropriate response from Democrats is, “No deal”.

    Conservative and billionaire hatred of Social Security is no excuse for deficit terrorists to continue threatening global chaos, whether now or three months from now. This is not the time to take pressure off of those god-forsaken madmen, not when their backs are to the wall and they can be crushed in public opinion.

    So of course the Democrats will cave in and make nice.

    Like or Dislike: Thumb up 5 Thumb down 0

  9. gVOR08 says:

    Two legs of the cheap card table have folded. How long do you think the last two legs will hold out? I think Boehner’s plan is to keep quiet for three months, then quietly vote a permanent increase. If Boehner were a leader of anything, I might think he had a chance of pulling off his plan.

    Like or Dislike: Thumb up 2 Thumb down 0

  10. michael reynolds says:

    @bk:

    You obviously don’t know dick about Las Vegas politics

    .

    Do not attempt to list all the things Tsar knows dick about. Life’s too short.

    Like or Dislike: Thumb up 8 Thumb down 0

  11. An Interested Party says:

    Reid is a vicious partisan hack in the mold of Daschle and Mitchell and he actually gets off on the notion of his own power. He might look like a tax accountant, but you don’t get anywhere in Las Vegas politico circles without a trace of Tammany Hall in your veins.

    In other words, Reid, Daschle, and Mitchell are/were able to turn the tables and play the political game better than recalcitrant and radical Republicans…the Victimhood Tour continues, with the writer of the above sob song serving as the chief clown at the front of the pathetic parade…

    Like or Dislike: Thumb up 9 Thumb down 0

  12. swearyanthony says:

    It will be pretty easy to get the Republicans to fold on spending. Make them itemise the spending cuts they want. Until now they’ve been demanding not only that Obama cave, but that he shoots the hostage for them. Make them own the cuts to Medicare, Social Security &c &c and watch them fold.

    Like or Dislike: Thumb up 3 Thumb down 0

  13. anjin-san says:

    I have lived in Las Vegas for years. You obviously don’t know dick about Las Vegas politics.

    Tsar reminds me of a great Yogi Berra quote. When told that a reporter had been badmouthing him, saying “that Yogi, he talks a lot, but he doesn’t know anything”, Berra replied “it’s a lot worse that that. Not only do I not know anything, I don’t even suspect anything”…

    Like or Dislike: Thumb up 0 Thumb down 0

  14. That may seem like a good idea at first glance, but as we head into the budget battles in March, it’s the House that holds the purse strings and the GOP is going to be in a far better bargaining position.

    I seriously doubt that….

    This how they are positioning themselves:

    While at a GOP retreat, House Republican leaders on Friday announced a vote next week on a three-month extension of the debt limit, with a requirement that both chambers pass a budget or else go without pay.

    All the Democratic Senators are shaking in their suits, biting their fingers nails, worried about how they’re going to pay their mortgages.

    The Republicans are going to need a longer lever and a stronger fulcrum.

    Like or Dislike: Thumb up 3 Thumb down 0

  15. OzarkHillbilly says:

    The agreement, reached in closed-door negotiations at a party retreat in Williamsburg, Va.,

    I love this…. Tell me guys, just exactly who were you negotiating ransom payments with? Oh yeah, yourselves. Boy I would have loved to have been a fly on the wall during those talks. It would make a great screen play for a Jim Carrey movie.

    Uh, yeah. What percentage of Zombieland do you suppose even is aware of that “minor” fact? Five percent? Two percent? Zero point two percent? Geez.

    What percent of you Tsar, is aware of just exactly how minor a point a budget is? That once passed they are totally and completely ignored by both parties? How stupid does one have to be to continually harp on a completely inconsequential fact?

    Appropriation bills are where the rubber hits the road, idgit. Or haven’t you noticed?

    Like or Dislike: Thumb up 5 Thumb down 0

  16. Ben Wolf says:

    @michael reynolds: It would help if Czar Nicky had the courage of his convictions, but he seems either unwilling or incapable of standing his ground and defending his ideas. He posts a rant and then runs for the hills. I can’t decide whether he’s mentally ill or just trolling for reactions.

    Like or Dislike: Thumb up 2 Thumb down 0

  17. Neil Hudelson says:

    @Ben Wolf:

    I can’t decide whether he’s mentally ill or just trolling for reactions

    Or just a testicle-less coward.

    Like or Dislike: Thumb up 0 Thumb down 0

  18. Bob says:

    What part of the “I will not negotiate over the debt ceiling”, don’t the Republican Congressional leaders not understand.
    The offer being made: if the Senate does this, then we will do that… isn’t that a negotiation offer?

    I also agree that the “budget” is inconsequencial. It’s the actual appropriations, the authorization for outlays that are critical. To that extent, the House could shut down all discretionary spending.

    Like or Dislike: Thumb up 0 Thumb down 0

  19. Jenos Idanian #13 says:

    I’m drawing a blank here: when did the Republicans in the Senate filibuster a budget? Try to? Threaten to?

    The whole “let’s just ignore the law and not bother with a budget” started when the Democrats, “led” by Pelosi, held the House. There’s no filibustering there, and the Dems still didn’t pass a budget.

    We don’t have a budget, in direct contravention with a couple centuries of precedent and an actual law on the books, because the Democrats decided we didn’t need one. Own it.

    Like or Dislike: Thumb up 0 Thumb down 2

  20. David says:

    @Jenos Idanian #13: Since when is not honoring debts already incurred a valid political position? When did the Republicans become deadbeats who can’t be bothered with paying for the things they already bought? Own it.

    Like or Dislike: Thumb up 0 Thumb down 0

  21. Jenos Idanian #13 says:

    @David: Since when is “we’re already $16 trillion in the hole with no plan to pay it back, it’s irresponsible to NOT borrow more money” a valid logical position?

    Eh, I’m not going to live forever. Screw the kids who’ll have to grow up with that debt, gimme what I want NOW.

    Like or Dislike: Thumb up 0 Thumb down 1

  22. David says:

    @Jenos Idanian #13: Do we need to address the deficit in a comprehensive manner, yes we do. Is not paying already incurred bills the way to do it? It is if you are a deadbeat. Own it.

    Like or Dislike: Thumb up 1 Thumb down 0

  23. Jenos Idanian #13 says:

    @David: Default is only a risk if we don’t prioritize our spending.

    And you are right about one thing — we all “own” the debt piled up. The almost-all-pork failed “stimulus” bill, Cash for Clunkers, extended unemployment, Green Energy money for Democratic backers, ObamaCare, a host of others… a couple of trillion dollars in debt that the Democrats fought like hell for, and now we all “own.”

    Like or Dislike: Thumb up 0 Thumb down 1

  24. David says:

    @Jenos Idanian #13: Two wars off the books, Medicare Part D, cutting taxes when we should have been eliminating debt and presiding over the greatest economic meltdown since the great depression. You take medicare part d, the two wars and the tax cuts out of the equation and the country’s finances would look a hell of a lot better. And btw, I still have seen no credible source that has the Affordable Health Care Act adding to the deficit, all the numbers I see show that repealing it adds to the deficit.

    The only way the United States can default on anything is if Congress refuses to authorize the President to pay the bills that Congress has required him to pay. As to prioritizing spending, that goes back to a comprehensive plan, which must include both spending and taxes. We need to shrink the defense budget, we need to address long term solvency for social security and medicare (which we could do fairly easily by adjusting the cap based and then scaling it by inflation going forward) and we need to address the over all costs of health care in this country.

    So far all the republicans want to do is increase defense, gut medicare and social security and lower taxes. They don’t have a plan, they have a failed ideology.

    Like or Dislike: Thumb up 1 Thumb down 0

  25. Jenos Idanian #13 says:

    @David: That’s an awful lot of words, David. Let me see if I can shorten it up a bit:

    “No, the Democrats haven’t even tried to pass a budget in four years because BUSH!!!!!!”

    But to use your own argument: dont’ we all “own” all those things you cite? Why doesn’t it matter who supported and passed all the spending I cited, but it does for the ones you cited?

    Oh, yeah. Because what I cited makes Democrats look bad, while what you cited makes Republicans look bad.

    And I presume you’re in favor of repealing Medicare D? You better get right on that, sport.

    Like or Dislike: Thumb up 0 Thumb down 3

  26. Jenos Idanian #13 says:

    @David: And if I can drag you (kicking and screaming, I presume) back to the topic, what is so bad about the Republican proposal to couple a debt ceiling hike to a budget? Are you so opposed to the federal government obeying the law and following a precedent followed for over 200 years just because Republicans are in favor of it?

    And just what do you mean by “comprehensive,” anyway? That’s usually a buzzword meaning “I don’t have any ideas of my own, so I’ll call yours shallow and lacking without actually putting forth any of my own.” See “Comprehensive immigration reform” for other examples.

    One more thing… just how high should the debt ceiling be? Obama was opposed to raising it back in 2006, and gave good reasons for that. But now it’s different that he’s spending the money, of course.

    Just how high? 18 trillion? 20?

    Let’s just make it eleventy zillion zillion.

    Like or Dislike: Thumb up 0 Thumb down 3

  27. David says:

    The control on the debt is congress controlling what we spend and what we take in. The debt limit only prevents the president from paying the bills congress has required him to pay. As to comprehensive reform? Drop defense spending down a lot, increase the cap on FICA and then have the cap increase by CPI, begin raising tax rates as the economy improves, look at tax deductions, ag subsidies, and other corporate welfare programs, improve on the affordable healthcare act, add in a single payer option (Medicare for all).

    The focus on a “budget” is disingenuous, budgets do not spend any money and do not affect revenues. Appropriation bills spend money and revisions to the tax code, etc affect revenues. Should those be tied to the language in the budget, sure, are they, no.

    This continuing debt ceiling crisis manufactured by the Republicans puts more uncertainty in to the economy than anything in the affordable care act. For a party that rants on this administration causing uncertainty to play chicken on this is beyond belief.

    Specifically back on the Republican proposal, it is nothing more than smoke and mirrors. First of all, pretty sure the withholding of pay would have some constitutional issues (there are enough discussions out there that I am sure you can look them up yourself) and it doesn’t actually require a budget to be passed and signed into law, just that both houses have to pass one. A responsible republican party would either agree to get rid of the debt ceiling in its entirety or raise to to the point that it wouldn’t have to be addressed again until after the next presidential election. Rehashing this every few months is a waste of time and accomplishes nothing. This is time that could be better spent on long term solutions.

    Like or Dislike: Thumb up 2 Thumb down 0

  28. David M says:

    @David:

    The focus on a “budget” is disingenuous, budgets do not spend any money and do not affect revenues. Appropriation bills spend money and revisions to the tax code, etc affect revenues. Should those be tied to the language in the budget, sure, are they, no.

    Jenos actually knows this, he is just repeating what he’s been told is the message.

    Like or Dislike: Thumb up 1 Thumb down 0

  29. Xenos says:

    @Jenos Idanian #13:

    And you are right about one thing — we all “own” the debt piled up. The almost-all-pork failed “stimulus” bill, Cash for Clunkers, extended unemployment, Green Energy money for Democratic backers, ObamaCare, a host of others… a couple of trillion dollars in debt that the Democrats fought like hell for, and now we all “own.”

    Your facts are all gefucked, so zhy should anyone respond to this sort of thing?

    For one: “almost-all-pork failed ‘stimulus bill”. It did not fail; it worked pretty well at stopping the collapse in the economy. And it was 1/3 tax cuts. Are tax cuts now considered to be pork, at least if a Democratic President signs off on them? We need a new wingnut style manual and dictionary here.

    Like or Dislike: Thumb up 3 Thumb down 0

  30. Justinian says:

    Every day, the federal government has to refinance over four thoudand million dollars of debt that comes due, in addition to falling another one thousand million dollars further into total debt outstanding.

    The government is going bankrupt. It is not a matter of if, but when. And all they are doing in Washington (and on this page) is making sure that the blame falls on someone else.

    The great number of the American public belong to neither party. As Mercutio said in his dying breath, a curse on both your houses.

    Like or Dislike: Thumb up 1 Thumb down 2

  31. HappyBob says:

    Law requires that the President propose a budget each year. As far as I can tell President Obama has done this.
    Does the law require that the legislative branch adopt a budget each year?

    Like or Dislike: Thumb up 0 Thumb down 0

  32. LaMont says:

    it’s the House that holds the purse strings and the GOP is going to be in a far better bargaining position.

    I fail to see how the GOP has any advantage at all when their bargaining positions are so widely unpopular. This is why they will not specifically say what they want to cut but rather get Obama and the senate democrats to fall on that sword instead.

    And also, I always believed the republicans to be the real reason why uncertainty existed during Obama’s presidency after the recession. So the republicans kicking the debt ceiling can down the road by only 3 months basically confirmed that not only are they responsible for continued uncertainty, they essentially want it that way. I have come to realize that these conservatives will do anything to see if Obama and/or the democrats can get the blame. They will bail themselves out only after it is clear they can not win the battle. And they don’t care it holding out will make them look just a little more reckless in the process. That appears to be the risk they are willing to take time and time again to make their opposition look bad. Unfortunately, no one wins when the republicans govern this way. This is essentially why they are the most hated congress in decades!

    Like or Dislike: Thumb up 1 Thumb down 0

  33. anjin-san says:

    almost-all-pork failed ‘stimulus bill

    Stimulus money made three absolutely critical infrastructure happen in the bay area, along with quite a few smaller projects. People will continue to benefit from these on a daily basis well after all of us are gone.

    Why do Republicans love infrastructure in Iraq, but hate it in America?

    Like or Dislike: Thumb up 0 Thumb down 0