June 23, 2017 / 6:36 PM / 3 years ago

As debt limit looms, House leaders eye bipartisan deal

WASHINGTON (Reuters) - Congressional leaders are quietly working on a bipartisan deal to raise the U.S. debt ceiling within weeks, hoping to prevent the difficult debt issue from snarling a budget fight to come in September, a senior Democratic budget writer said on Friday.

John Yarmuth, top Democrat on the U.S. House of Representatives Budget Committee, told Reuters there is bipartisan interest in raising the debt limit before August.

“There is talk going on, there is leadership conversation about this,” said Yarmuth, who added that House Democrats do not plan to demand concessions from Republicans in exchange for supporting a debt limit increase.

Unlike most countries, the U.S. government has a statutory limit on how much money it can borrow to cover the budget deficit that results from Washington spending more than it collects in taxes. Only Congress can raise that limit.

The Trump administration has warned the debt limit will need to be raised in the fall. Treasury Secretary Steven Mnuchin last month moved the target deadline for action to September from October, saying tax receipts are coming in slower than expected.

Senate Republicans remain in contact with the administration on the issue, but don’t have further updates on their plans, a senior aide said.

House Democratic leader Nancy Pelosi has said Democrats will support a “clean” debt-limit bill, free of conditions. Conservative Republicans in the House Freedom Caucus have traditionally voted against clean increases and have already indicated they would like to raise the debt limit less than requested by the Trump administration.

Congress’s agenda is crowded, with healthcare legislation pending and a deal needed by late September on funding the government. Raising the debt limit adds another obligation.

Over the past decade, raising the limit went from a routine job to a politically charged negotiation. In 2011, under former Democratic President Barack Obama, Republicans began demanding concessions in exchange for their votes to raise the limit.

As a result, the nation twice went to the brink of busting the debt ceiling before an agreement could be reached.

Yarmuth said Democrats are not opposed to attaching a debt ceiling increase to “bipartisan” legislation, but warned against adding “poison pills.”

“I don’t think our side wants to play games with this,” he said.

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Bipartisan discussions in the Senate on the debt limit have not begun, a leadership aide confirmed.

Senate Democratic leader Chuck Schumer told reporters earlier this week that the responsibility for raising the limit lies with Republicans and warned against tying the debt limit to deficit-creating tax cuts for the rich.

Reporting by Ginger Gibson and Amanda Becker; Additional reporting by Richard Cowan; Editing by Kevin Drawbaugh and Andrea Ricci

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