Debt ceiling conundrum

Paul Ryan’s debt ceiling conundrum

The speaker is getting squeezed between a White House seeking a ‘clean’ debt limit increase and a House GOP conference that is demanding spending cuts.

By RACHAEL BADE

Speaker Paul Ryan is in a serious debt ceiling quandary.

The House GOP conference — from Freedom Caucus hardliners to mainstream Republicans allied with leadership — are balking at the Trump administration’s request for a “clean” debt ceiling hike without spending cuts.

The disagreement puts Ryan in an awkward situation of having to choose between his conference’s desires and those of the White House. GOP insiders concede it could even force the Wisconsin Republican to, for the first time, violate the so-called Hastert rule, an unofficial GOP understanding that bills should be supported by a “majority of the majority.”

“180 Democrats and 35 of us in the Tuesday Group will carry the heavy burden,” predicted centrist Rep. Chris Collins (R-N.Y.), a Trump ally who is one of just a handful of Republicans open to supporting a clean debt ceiling increase. “That’s what always happens, isn’t it?”

Relying on Democrats to carry major fiscal legislation has been common in recent years. But it ultimately helped drive out ex-Speaker John Boehner (R-Ohio) and would be problematic for Ryan in the eyes of the conference. One Republican close with leadership told POLITICO “Ryan is going to be in trouble if the White House makes him do this.” A senior House Republican staffer likewise said leaders — and the White House — will “get completely crushed by not just angry members but the outside groups will go crazy.”

“I would hope he’s not forced to do something like that,” said Oklahoma Republican Tom Cole, a senior budget panel member close with leadership. “We ought to use the opportunity to try and deal with the deficit in some way. That’s the classic Republican approach. But we’re going to need Democratic support, so we’ll see.”

He added: “It’s a tough situation … Welcome to being speaker!”

In recent years, Republicans have advocated for spending reforms to accompany any increase in the nation’s now more than $20 trillion borrowing limit — largely to no avail since Democrats controlled the White House. With all the levers of power in Washington, House Republicans want to make the most of it.

“I think that we could use some of the leverage for some other opportunities,” said Rep. Dennis Ross, a Florida Republican on the whip team. “I think there are some options out there to make it more palatable to pass the debt ceiling… We’ve never been for a clean debt ceiling, and now we’re in charge.”

Not so fast, says Treasury Secretary Steven Mnuchin. He’s been telling leadership and lawmakers that he wants to avoid partisan brinkmanship that could spook markets, as lawmakers did in 2011. Back then, the U.S. saw its credit rating downgraded during the ugly back and forth. Mnuchin wants to avoid that at all costs and is pressing Congress to pass a debt ceiling without policy strings.

House members aren’t falling in line easily.

“What you ask for and what you get in this city are not the same thing,” said Rep. Mark Sanford (R-S.C.) of Mnuchin’s request for a policy rider-free increase in the borrowing limit. "Debt ceilings represent political leverage and a chance to say, ‘Okay, if you want to increase the pay-for, let’s look at some way of decreasing how we got here in the first place.”

Rep. Scott Perry (R-Pa.) says he told Mnuchin in a Freedom Caucus meeting that “I need to see a way out of just continued deficit spending and racking up the debt.”

“Show me the way out and then we can have a conversation, but don’t tell me there’s nothing to see here and we just need to vote for this. Because I can’t tell my constituents that,” he said.

Ryan has yet to commit to a clean debt ceiling increase. Asked about his plans during a press conference Wednesday, the speaker said “I’m not foreclosing any option at this time.” He said he’s having conversations “not just with our members but with Democrats and the other side of the Capitol in the Senate.”

But, practically speaking, it’s likely to come to a bipartisan lift, many insiders believe.

After all, to avoid a filibuster, Senate Republicans will need at least eight Democrats, who are loath to support spending cuts, to pass a debt ceiling increase. While Republicans could theoretically try to use the procedure of reconciliation to pass a partisan debt limit increase with a simple majority, it’s unclear there’s enough time. Plus, leaders want to use the fast-tracking tool for tax reform, a process that will take months — likely well beyond the “X” date that the government runs out of authority to borrow money to pay its bills.

A number of Republicans close to leadership aren’t even sure there are 35 Republicans who will support a clean debt limit boost. The White House and Mnuchin stumping for support could theoretically drive up those numbers — and provide Ryan with political cover. But it’s unclear how successful they will be given the deep resentment against debt ceiling votes among House Republicans.

Rep. Morgan Griffith, a rare Freedom Caucus member who enjoys a working relationship with leadership, wants Ryan to at least initially allow the House to pass a more conservative debt ceiling increase with cuts — even if the Senate can’t and the House ultimately caves. Such a procedure would buy goodwill among members, even if they lose in the end.

“We are not supposed to be the lapdog of the Senate leadership. That’s not our role,” said the Virginia Republican.

Ask how he’d feel if he didn’t get a bill with spending cuts, Griffith added: “I would say that it would leave an unpleasant taste in the mouths of those that might have to swallow it.”