GOP’s debt ceiling scheme

Conservatives pan GOP’s debt ceiling scheme

House and Senate leaders plan to tie a debt limit boost to Hurricane Harvey aid — and pass a bill by the weekend.

By BURGESS EVERETT and RACHAEL BADE

GOP leaders have settled on a strategy to passing a debt ceiling increase reviled among conservatives: By marrying the toxic measure with a popular emergency spending package for the victims of Hurricane Harvey.

But there's a brewing intraparty fight over the move, which, if all goes according to plan, will deliver legislation for President Donald Trump's signature by Sunday.

The party's right flank quickly panned the package as irresponsible on Tuesday, noting the Republican Party has railed for years against raising the debt ceiling without structural fiscal changes.

“It’s a mistake to raise the debt ceiling without having some dramatic reform to our budget process," said Sen. Rand Paul (R-Ky.), who is among a growing number of GOP lawmakers preparing to fight the measure. "A $20 trillion debt is really our no. 1 security risk so to just keep raising the debt I think is a huge mistake."

Under the emerging strategy, the House would pass a nearly $8 billion disaster relief bill Wednesday, and the Senate would then attach a debt ceiling increase. Paul and other congressional conservatives can fight it, but they do not appear to have the numbers to win.

"I believe that FEMA is going to literally run out of money at the end of this week. So it's imperative we get that [Harvey] supplemental passed. And the leader has made the decision to attach the debt limit to that. And I support that," said Senate Majority Whip John Cornyn (R-Texas) of Senate Majority Leader Mitch McConnell.

Republican leaders are concerned that preparations for Hurricane Irma, a second massive storm that could hit Florida in the coming days, could deplete FEMA’s emergency funds as soon as this week. Harvey’s destruction costs are already sucking up funding faster than leaders believed possible just a week ago — requiring quicker action on the debt limit.

But conservative backlash began brewing immediately. Paul said in an interview he would seek to delay the measure without a full-throated debate and amendment process in the Senate. He said a closed debate on simply attaching the debt ceiling to the Harvey bill is "inappropriate and I will fight that."

“Any spending should be offset by spending cuts elsewhere. It’s one thing to say you are compassionate and want to give people money but if you are simply adding to the debt to give people money I think it’s not really appropriate," Paul said. "We’ll offer an amendment that will offset the spending with cuts in foreign aid to other countries."

Republican Study Committee Chairman Mark Walker during a Fox News interview Tuesday afternoon called the strategy “unsettling.” The conservative North Carolina Republican said he’s “grateful that in Texas the floodwaters continue to recede, but here in the swamp it looks like they continue to rise.”

“For Republicans, we have to be willing to hold the line when it comes to the out of control spending,” he said, urging Republicans to decouple the two and reduce spending as part of a debt ceiling increase.

Even some Texans want to deal with the issues separately.

“My hope is that we will see strong bipartisan support for substantial relief from the crushing damages and I think the best way to achieve that support is a clean relief package, not a relief bill tied to other unrelated matters," said Sen. Ted Cruz (R-Texas), one of the most conservative senators. He would not say how he would vote if the two matters are intertwined.

Still, there may be little the conservatives can do to stop the package. If the Senate begins considering Harvey aid on Thursday, Paul will only be able to delay it into the weekend. FEMA’s emergency response numbers could dwindle to zero by then, potentially forcing the House to stay in session into the weekend.

A senior Senate Democratic aide cautioned against the GOP relying on Democratic votes without seeing the details of the proposal, such as how long the debt ceiling would be lifted. In recent years, Democrats have shouldered the bulk of debt and spending votes and they have significant sway over negotiations and may push for a short debt limit extension to preserve leverage for the next fight.

"None of this is easy," Cornyn said.

But Republicans are portraying the unusual legislative marriage as unavoidable.

House Majority Leader Kevin McCarthy (R-Calif.) said on Fox Business Network’s "Morning’s with Maria" that Treasury Secretary Steven “Mnuchin is telling us, ‘If you pass just a supplemental, they may not be able to put the money forward without having the debt ceiling raised.’”

“You don’t want an inability to obligate funds because of either the disaster relief accounts running out of money or because Treasury is running low on its cash balances in an emergency,” added a senior Republican aide familiar with the issue. “The time to address these issues is this week.”

A FEMA spokesperson said the agency had $541 million available for Harvey relief and $472 million available for Irma and wildfires as of Monday morning. That money could run out by Friday, said three aides familiar with the funding discussions, placing added urgency on Congress to move.

Republicans are also considering adding a bill to fund the government to the Harvey-debt limit package, with a possible shutdown looming for Sept. 30. That would offer more disaster assistance more quickly to those affected by Harvey and Irma, one Republican aide argued. But it may not be doable on a tight timetable and with the government funding deadline still weeks away.

Many GOP lawmakers routinely oppose temporary funding bills as bad policy, and any single senator can delay a bill for several days. With the disaster aid needed urgently, loading up this week’s Harvey relief further would increase the chances of a messy fight over debt and spending at a critical time.

President Donald Trump will huddle Wednesday with McConnell, Speaker Paul Ryan (R-Wis.), and Democratic leaders Chuck Schumer (D-N.Y.) and Nancy Pelosi (D-Calif.) to discuss next steps. White House budget director Mick Mulvaney will also be on the Hill and plans to brief all GOP senators at a Wednesday lunch, according to a Republican aide.

Over the weekend, top White House officials took to TV talk shows to warn that any new FEMA spending would deplete the Treasury Department’s coffers even quicker this month. They originally asked GOP leaders to raise the debt ceiling by the end of September, but that date is moving up with the Harvey package.

GOP leaders are hoping Trump will come out and ask publicly for a debt limit-Harvey bill, giving them cover with unhappy members of the party’s right flank.

"These are the president’s immediate priorities: Pass disaster relief. Prevent a default. Fund the government," McConnell said on Tuesday afternoon.

Conservative complaints about a debt ceiling lift that doesn’t cut spending are only likely to crescendo in the week ahead and could cause serious problems — particularly because other more moderate Republicans are also unhappy with the strategy. Those pushing back against the strategy include a wide range of Republicans, from House Freedom Caucus Chairman Mark Meadows (R-N.C.) to more centrist members like California GOP Rep. Jeff Denham, a close ally of McCarthy’s.

Denham said in an interview Tuesday that he prefers to handle the debt ceiling on its own or paired with some FEMA spending reforms.

“I get nervous anytime we tie anything to the debt ceiling,” he said.