Saturday, October 1, 2022

Congress Wants to Accept Debate, but Price for Leaving Debt Limit Behind is an Indicator

President Trump gave an optimistic preview of his meeting with congressional leaders Wednesday, declaring: “We can make a deal — a very, very big deal.” Lawmakers from both parties said they expected the one-on-one talks to be wide-ranging, detailing the government’s fiscal and economic needs as well as its partisan divisions.

What’s more, the Treasury Department indicated Wednesday that the government would reach its $20 trillion debt limit, a situation that, if Congress refuses to increase the limit, would push the United States closer to default on its debt obligations.

Congress will have to address that issue not only this month but for the rest of the year. The Congressional Budget Office on Wednesday said it expected the government to hit the debt limit between mid-July and early August.

The latest target is the ceiling established by the U.S. Treasury, not the law of the United States as a whole. The last time the debt limit was hit was Oct. 17, 2011, the government was still in recession, and the last interest-rate increases were under President George W. Bush.

Nonetheless, lawmakers who have advocated raising the debt limit said Wednesday that the increase should not be seen as a sure-fire political winner.

“Both Democrats and Republicans, no matter how our rhetoric, still have faith in the system,” said Representative Jim Cooper of Tennessee, a Democrat who voted for raising the limit in 2011. “We have to have good faith that this is not a subject to be played out in the political arena — to be done in August or September or November.”

But many lawmakers, including Republicans, want to tie an increase in the limit to corresponding increases in federal spending, so that cuts could be made on other programs to avoid so much spending. But they will need the votes of a handful of skeptical Democrats to avoid a Democratic filibuster.

So far, the proposal has elicited mixed responses. On Wednesday, Senate Majority Leader Mitch McConnell of Kentucky said, “I’m opposed to attaching debt ceiling increases to any measure on the floor.”

But Senator Steve Daines of Montana, a Republican, said, “It’s clearly up to the Democrats. I think there is bipartisan agreement that we have to raise the debt ceiling.”

The White House announced Wednesday evening that the meeting with Mr. Trump would go ahead, though few other details have been revealed.

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