Saturday, October 1, 2022

‘Let’s get the hostages out before the election’: Republicans mull debt ceiling

Tensions have been mounting between the federal government and Congress’s Republican-led majorities as they mull whether to extend federal borrowing authority for three more months or wait until after the November midterm elections to deal with the nation’s rising debt.

“We should not play politics with the people’s livelihood,” John Boehner, the former speaker, said on Monday at a Politico event. “And so, if they won’t listen to us, let’s get the hostages out before the election.”

Boehner, who left Congress last year, recalled this opportunity to raise the debt ceiling four years ago when he was speaker, but it was caught up in ongoing congressional debate over the implementation of the Affordable Care Act and the “cromnibus” spending bill.

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Instead, lawmakers left for the summer recess without addressing a threat to the nation’s credit ratings that has dragged on for two years, making it impossible for them to say when they could return and force the government to prioritize debt payments as a last resort.

The government is now slated to hit the borrowing limit of $21.4tn as soon as the end of this month. Last summer, the country came very close to defaulting on its debt, something that would have wreaked havoc on the economy in an election year.

Many Republican senators, including Ron Johnson of Wisconsin, James Lankford of Oklahoma and Cory Gardner of Colorado, have expressed support for a short-term extension of borrowing authority until at least the midterm elections, so that lawmakers could have more time to deal with the issue in September.

“This is truly time to break the logjam,” Gardner wrote on Twitter. “Let’s get this done before the debt ceiling becomes a real crisis. It’s time to put people ahead of politics.”

There are also “serious concerns” about raising the debt ceiling through the year, two senior Republican Senate aides told Reuters.

But Mitch McConnell, the Senate majority leader, told reporters that raising the debt ceiling for three months would allow lawmakers to “wipe the slate clean” on what is considered the most consequential fiscal policy decision for the government in 2018.

“Any bill to avoid default would include automatic continuing resolutions for departments and agencies that would fund all work in their current fiscal year for three months, for fiscal 2019, for fiscal 2020 and for fiscal 2021,” McConnell said.

A short-term extension through November would also give congressional leadership space to advance tax reform legislation in the Senate, rather than have to use the spending plan as a vehicle.

“I believe if we do this, we will dramatically enhance the prospects of coming together on important legislation, including tax reform,” McConnell said.

Trump previously called on Congress to pass a three-month extension, then last week said he was open to a three-year solution.

Trump’s comments came a week after lawmakers faced a deadline of when to lift the debt ceiling or pay down the accumulated debt accrued by the Obama administration. Republicans have attributed the years-long stalemate on that matter to a dispute over whether or not there should be tax increases, a position they have tried to embrace as an alternative.

In March, the Trump administration proposed raising the deficit by $2.66tn over the next decade in order to enact the budget deal signed by Trump.

Meanwhile, a handful of conservatives have criticized the leadership for prioritizing debt payments ahead of other spending priorities.

“America cannot continue to borrow and throw economic bombs into the marketplace,” the members of the House Freedom Caucus, a group of almost 30 hardline fiscal conservatives in the chamber, wrote on Tuesday.

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