GOP faces debt-limit divide

By Peter Schroeder – 10/08/15 06:00 AM EDT

With less than a month to go until the Nov. 5 deadline, congressional Republicans are divided on what strategy to adopt in the fight over the debt ceiling.

Conservatives see the looming debt hike as leverage that could be used to extract concessions from the Obama administration.

But moderates are wary of flirting with a federal default, something the business world has long warned would be disastrous.

GOP lawmakers can’t even agree on who should take the lead on the issue, with many questioning whether outgoing Speaker John Boehner (R-Ohio) should be involved ahead of his resignation from Congress at the end of October.

Some members see Boehner’s exit as a prime opportunity to resolve the issue and clean the slate for the next leadership team.

“Would I rather see it dealt with before Boehner leaves? Yes,” said Rep. Richard Nugent (R-Fla.). “We just need to get it off the table, let it be done under Boehner’s leadership, and not saddle the new incoming Speaker with that same issue.”

“The few weeks that Speaker Boehner has left can be put to good purpose,” added Sen. Roger Wicker (R-Miss.). “It’s better not to leave the mess for his successors.”

But others believe GOP leaders have made a mistake by preemptively ruling out debt-limit drama. They say it’s time for a new leadership team to force the issue and make Obama abandon his no-negotiation stance.

“It should be left to the next leadership team,” said Rep. Marlin Stutzman (R-Ind.). “It’s a fresh start for whoever is coming in.”

Treasury Secretary Jack Lew on Friday told lawmakers they need to increase the $18.1 trillion debt limit by Nov. 5, when his department will have exhausted all the “extraordinary measures” it is now using to avoid default.

After that date, Lew said the government would quickly run out of cash to pay its bills, putting the United States at risk for a default that could send shockwaves through the global economy.

Outside analysis from the Bipartisan Policy Center released Wednesday projected the government would likely miss a debt payment sometime between Nov. 10 and Nov. 19 without a debt-limit increase.

The leadership shake-up in the House prompted by Boehner’s surprise resignation has complicated the debt issue. House Republicans will meet privately Thursday to cast their votes for Speaker, with Majority Leader Kevin McCarthy (R-Calif.) expected to receive the most votes.

But it remains to be seen whether McCarthy can garner the 218 votes on the House floor necessary to win the Speakership, with a bloc of conservatives in the House pledging their support Wednesday to the long-shot bid of Rep. Daniel Webster (R-Fla.).

The wrangling over GOP leadership positions will continue until Oct. 29, when House Republicans are scheduled to choose the rest of the leadership team.

That timeline would leave the incoming Republican team with only a matter of days to deal with the debt limit. In the past, drawing close to the deadline has caused turmoil in the stock market.

Some Republicans said they are optimistic that the groundwork can be laid in advance for dealing with the debt hike.

“If we know that the next Speaker of the House has to deal with the debt ceiling, then we can have a lot of conversations,” Stutzman said.

Conservatives, emboldened by the Boehner resignation they take credit for, are eager to see the borrowing cap again used as a bargaining chip.

At the start of the new Congress, Boehner and Senate Majority Leader Mitch McConnell (R-Ky.) were adamant that so long as they were in charge, Washington would not return to brinksmanship over shutdowns and defaults.

Conservatives view that stance as relinquishing leverage against the White House and are eager to change course.

Rep. Raúl Labrador (R-Idaho) said he would like to see GOP leaders aggressively make the case for fiscal reforms ahead of the debt-limit deadline.

“Imagine a leader who for seven weeks is articulating the position of the conference,” he said. “Versus a leader who starts seven weeks before, saying, ‘We can’t shut down the government. We can’t do this. We can’t do this other thing.’ Every word out of their mouth is that they’re not willing to fight.”

“We haven’t seen much from this administration or from leadership, frankly,” added Rep. Justin Amash (R-Mich.). “If the debt ceiling is going to be suspended or raised, then we need to have concrete reforms.”

Meanwhile, in the Senate, all the attention is focused on high-level budget talks that have begun among McConnell, Obama and Boehner.

Senators say they are holding out hope that somehow the three leaders can hammer out a budget agreement that allows them to also address the debt limit.

“It’s an issue that’s totally with McConnell and the White House,” said Sen. Bob Corker (R-Tenn.). “I’m sure that with whatever fiscal arrangement they agree to, they’re going to try and wrap the debt ceiling into it.”

Senate Republicans appear determined to avoid a default in November and a government shutdown before funding runs out after Dec. 11. They are wary of drama on either issue, with their majority at risk in the 2016 elections.

But the road to a deal remains elusive.

“Obviously, there are a lot of controversial items,” said Sen. John Cornyn (R-Texas), the Senate majority whip. “I don’t think we have any choice but to get there.”

McConnell disclosed the talks with Obama last week, but when asked for an update from reporters Tuesday, he repeatedly said he had no new news to share.

“It’s going to be very difficult. I’m not making any rosy predictions,” Wicker said.

“But if we’ll all negotiate, if we’ll participate as realists and as Americans, there is a sweet spot. … All-out victory is not possible in divided government. That’s seventh grade civics.”

Cristina Marcos contributed.