U.S. Republicans consider their list of demands on debt limit

WASHINGTON Fri Jan 24, 2014 11:28am EST

U.S. House Speaker John Boehner (R-OH) (C) stands with fellow Republican House leaders and addresses reporters in Washington, October 10, 2013. REUTERS/Jonathan Ernst

U.S. House Speaker John Boehner (R-OH) (C) stands with fellow Republican House leaders and addresses reporters in Washington, October 10, 2013.

Credit: Reuters/Jonathan Ernst

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WASHINGTON (Reuters) - Congressional Republicans are showing little stomach for another bruising fight over the U.S. debt limit next month, but they do want to extract some concessions in exchange for expanding the Treasury's borrowing authority.

A senior Republican aide said that the party's leaders in the Republican-controlled House of Representatives are in "listening mode" and seeking ideas from rank-and-file lawmakers.

The options range from demands for expanded offshore energy production to small tweaks in President Barack Obama's healthcare law to approval of the Keystone XL oil pipeline. Another idea put forth would involve overhauling federal job-training programs, an element in a House Republican jobs bill that has gotten no traction in the Democratic-controlled Senate.

"If the president is asking for a blank check, we're not going to do that," said Representative Luke Messer, an Indiana Republican who serves on the House Budget Committee.

"I won't support a debt limit increase unless it is partnered with policies that will either reduce the deficit or help grow the economy," he added.

Obama and congressional Democrats have vowed not to negotiate over raising the debt limit, arguing that it is Congress' responsibility to ensure that its spending obligations can be paid.

"We will not negotiate over whether or not the United States of America should pay its bills. And once again, before they get any further down this damaging path, we call on our Republican colleagues to not play politics with our economic recovery," Senator Patty Murray, chairwoman of the Senate Budget Committee, said in a letter to colleagues on Friday.

After last fall's government shutdown battle and two subsequent bipartisan fiscal deals, Republicans are focusing on demands that they believe Democrats might support. For example, a proposal to get rid of a tax on medical devices has garnered Democratic support in the past, though attaching it to the debt limit legislation would make it more controversial.

Representative Tom Price, a conservative Republican from Georgia, said he also would like to see other adjustments to Obama's landmark 2010 healthcare law considered as part of the debt limit debate, including to the so-called "risk corridor" provision that compensates insurers if they wind up with an especially unhealthy and costly mix of customers under the program.

"Nobody is interested, on our side of the aisle at least, in bailing out insurance companies. I would hope that the president isn't interested in bailing out insurance companies, and (Senate Majority Leader) Harry Reid isn't, so maybe there's some common ground there," said Price, who is a physician.

LISTENING TO MEMBERS

House Republicans will formulate their conditions for an increase in U.S. borrowing authority next week at a retreat in Cambridge, Maryland, a Chesapeake Bay resort town.

House Speaker John Boehner has recently softened his tone, calling last week for swift action by the House and Senate to raise the debt limit, and saying that the United States "shouldn't even get close to" default.

"No one wants another market-rattling showdown, but, at the same time, a 'clean' increase can't pass the House, or - most likely - the Senate," said a House Republican leadership aide who requested anonymity.

What House Republicans aren't talking about so far are demands for major cuts to the federal benefits programs known as entitlements - Social Security, Medicare and Medicaid - which are widely viewed as the biggest contributors to future debt growth.

Obama and Democrats have successfully resisted changes to these programs through three years of fiscal showdowns, and Republicans appear to be changing tactics.

Still, it's unclear whether Democrats will accept even scaled-back Republican demands on the debt limit.

A senior Senate Democratic aide said Congress should simply increase the debt limit so that the United States can pay its bills on time.

"There are no talks whatsoever about considering any ransom demands from Republicans. Republicans are having this conversation entirely with themselves," the aide said, speaking on condition of anonymity.

On Wednesday, Treasury Secretary Jack Lew sought to raise pressure on Congress for swift action, saying the government would exhaust its borrowing capacity by late February.

As part of the deal that ended the shutdown last October, Congress suspended the debt ceiling until February 7. The Treasury can employ extraordinary cash-management measures to stave off default, but these won't last long, because February is traditionally a big deficit month as tax refunds are paid out.

The debt-limit fights have proven costly in the past, helping the United States lose its top-tier credit rating from Standard and Poor's in 2011.

While it was unclear how close the Treasury came to a debt default last October, financial markets showed clear signs of stress, in some cases shunning what has traditionally been regarded as the safest, most liquid security on the planet: short-term U.S. Treasury debt.

Some banks and money markets refused to accept some Treasury bills as collateral for short-term loans, disrupting the $5 trillion repurchase market, a key source of day-to-day funding for the financial system. Prices fell, pushing yields on one-month Treasury bills up to levels not seen since the depths of the 2008 financial crisis.

But the latest showdown, coupled with Congress' ability to pass budget legislation over the past two months, may have set the stage for smaller, more manageable disagreements.

Steve Bell, a former Republican Senate Budget Committee staff director who is now with the Bipartisan Policy Center, said he believes debt limit demands will be "minor" and there is a good chance for other legislation, such as immigration reform, to take a more prominent role in Congress this year.

"I really think we have a chance this year to be really calm on the fiscal front," Bell said.

(Reporting by David Lawder; Additional reporting by Eric Beech; Editing by Caren Bohan, Jonathan Oatis and Paul Simao)

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Comments (21)
Bakhtin wrote:
Once again what the GOP say and what they do don’t match. They say they don’t want a showdown while making a list of demands – which is the exact opposite of democracy – backed by the threat of a showdown.

The GOP have got to be the stupidest political group on the planet. Look at their rhetoric:

“If the president is asking for a blank check, we’re not going to do that,” said Representative Luke Messer, an Indiana Republican’

How is raising the debt limit *to cover spending already approved by Congress* a blank check? That is like ordering a meal in a restaurant and then refusing to pay for it, and saying “If the restaurant is asking for a blank check, we’re not doing that”

A more accurate statement for the GOP would be “if the president thinks the GOP is going to pay it’s bills, we’re not doing that”.

Then you get the idiotic:

“Nobody is interested, on our side of the aisle at least, in bailing out insurance companies.’

… and this coming from the party who bailed out wall Street…

This is pure fantasy. There is no bail out in any shape or form. There is shared risk in 5% of cases, which is a financial necessity if you expect insurers to accept unlimited risks, and routine other counties – but US Republicans are so deeply ignorant of how business works that they think it is a bail out.

God help the USA if these fiscal ignoramuses ever get elected again. They will destroy the US economy for a second time. That is guaranteed. Just listen to the stupid stuff they say now.

Jan 24, 2014 6:36am EST  --  Report as abuse
euro-yank wrote:
Funny how the biggest part of the problem is not being discussed:

“What House Republicans aren’t talking about so far are demands for major cuts to the federal benefits programs known as entitlements – Social Security, Medicare and Medicaid – which are widely viewed as the biggest contributors to future debt growth.”

Perhaps that is because those “entitlements” are the ones that the Republican voters rely on. The old folks aren’t going to vote for the Republicans if their entitlements are cut.

Jan 24, 2014 12:06pm EST  --  Report as abuse
usagadfly wrote:
A suggestion for the GOP to think about, if they can conceive of such a thing:

how about a ban on foreign military deployments for 10 years unless an organized, geographically identifiable foreign Government attacks USA territory (other than embassies, consular offices, “American” corporation offices abroad, etc. etc. etc.)? This alone would solve the debt crisis for the Treasury.

And it would be a dramatic sea change for a Party which appears to have never seen a war it did not want to either jump into or start. Just a well meaning suggestion. Otherwise a truly conservative (i.e. non-militarist) party is going to appear and the Republican Party will join the Wobblies as a has-been party here.

This inability to change a war promoting stance now a half century old will be the end of every decent thing they might have hidden under the long list of military invasions they want the rest of us to do for them. All the public can see is a bunch belligerent and loud mouthed war mongers who do not like the American People at all and who accept and solicit payoffs from the rich wherever they can find them.

Jan 24, 2014 12:10pm EST  --  Report as abuse
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