Debt Ceiling

GOP Claims Victory in Retreat on Debt Ceiling

House Republicans’ deal to raise the government’s borrowing limit has some strategic advantages: It will force Senate Democrats into a vote they don’t want to make ahead of 2014.

01.19.13 5:00 AM ET

Raise the roof—the debt ceiling won’t come crashing down. Not for the moment at least.

Not after House Republicans, locked away at a closed-door retreat in Williamsburg, Va., announced that they would move next week to lift the federal government’s borrowing limits, keeping the nation from defaulting on its obligations.

The move seemed, on its surface, like a considerable tactical retreat for House Republicans. Previously, Speaker John Boehner and the rest of the House leadership had suggested that there would be no debt-ceiling increase unless there were corresponding cuts in spending, even if it meant potentially catastrophic effects for the global economy, and they had seemed impervious to entreaties from even some of their deep-pocketed backers in the business community. And President Barack Obama had taken a rare inflexible stance, refusing from the start to negotiate a deal.

But top Congressional Republicans in Williamsburg pushed back on the notion that they had retreated, saying the party was at last on offense after a series of defeats dating back to the most dismal of all—the reelection of President Barack Obama in November.

“I think what we have done is for the first time since the election put the Democrats on defense,” said a top GOP strategist who had been consulting with House leadership. “It will be interesting to watch the Democrats try to wiggle out of this one.”

If there is any wiggling, it will occur because, under the plan announced Friday, the House agreed to raise the debt ceiling for three months, but would not commit to further increases unless the Democratic-controlled Senate first passed a budget. All lawmakers, they stipulated, should be denied paychecks until a budget clears both houses. 

 “Before there is any long-term debt-limit increase, a budget should be passed that cuts spending,” Boehner said in a statement from Williamsburg. “The Democratic-controlled Senate has failed to pass a budget for four years. That is a shameful run that needs to end, this year.”

The Senate has not passed a budget in four years, mainly so that Democratic senators can avoid taking the kind of tough votes that could be used against them in a neatly packaged 30-second ad.

“Picking a fight on the debt limit, that was probably a 50 percent issue,” said Matt Mackowiak, a GOP consultant. “Not passing a budget, that is probably a 90 percent issue. Who doesn’t think the Senate should pass a budget. There are six or seven Democrats in tough spots for 2014 and [Senate Majority Leader] Harry Reid can’t protect them.”

House Republican aides told The Daily Beast the party was growing frustrated as it was continually getting blamed for a series of crises in Washington—the fiscal-cliff debate, the debt-ceiling show of 2011, and the near-shutdown of the federal government that occurred earlier that year.  And there has been comparatively little outrage directed at the Senate, even though by failing to pass a budget they have abdicated one of the core responsibilities of government.

“It’s like a journalist coming to work and never writing anything,” said one attendee of the Williamsburg confab. “It’s saying to the Senate: Do your job, and we will do ours. There is the potential for a pressure point of populist outrage.”

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Plus, by pushing the debt-limit issue back to mid-April, Republicans believe it will permit negotiations in the spring to center around areas in which the party has an advantage—the designated cuts to military and entitlement spending via the sequester, which are slated to go into effect then unless a comprehensive budget deal is reached, and the continuing resolution that must be passed for government to be able to continue to function.

“The debt ceiling is a terrible place to have the fight when you have the sequester and the continuing resolution,” a GOP adviser said. “There is so much misinformation about the debt ceiling, the word ‘default’ keeps getting thrown around. Why go for a big fight? Better to take a small bite of the apple here knowing that you will get a few more whacks at it down the road.”

Now Republicans will be able to go to their top donors on Wall Street ahead of the cycle and explain to them that they understand the need to keep the global financial system functioning by having the country pay down its debts.

Added another aide close to the GOP leadership, “It is a re-ordering of the issues coming up over the next several months. Putting the debt ceiling last puts us in a better position, because now the White House will have to deal with cuts earlier in the debate.”

Lawmakers on both sides of the aisle sounded relieved too that, for the moment at least, the GOP had backed off threats to send the country into default. And Democrats tried to refocus the message on the first part of the GOP’s agreement, the part that raised the debt ceiling, and not the Republicans’ demand that Democrats put their own budget priorities in writing.

“It is reassuring to see Republicans beginning to back off their threat to hold our economy hostage,” said Adam Jentleson, a spokesman for Majority Leader Reid. “If the House can pass a clean debt-ceiling increase to avoid default and allow the United States to meet its existing obligations, we will be happy to consider it. As President Obama has said, this issue is too important to middle-class families’ economic security to use as a ploy for collecting a ransom. We have an obligation to pay the bills we have already incurred—bills for which many House Republicans voted.”

Praise for Boehner’s move came from parts of the GOP establishment that have been critical in recent years. Michael Steele, a former head of the Republican National Committee who has been pushing the party to expand its base, compared the House Republicans to “punch-drunk boxers.”

“We have to move out of the corner and into the center of the ring,” he said. “We have taken a bruising the last couple of weeks. This is a bell ringing, allowing us to catch our breath after the inauguration.... Who wants the lead-off talking point heading into the 2014 cycle that the Republicans stood in the way again and were willing to drive the country to default?”

And Chris Chocola, the president of the Club for Growth, which has funded primary campaigns against lawmakers who have insufficiently toed their deficit-cutting line, praised the move as well.

“All we have ever advocated is for responsible behavior, and this looks like responsible behavior,” he said. “To go forward with a debt-ceiling increase and then to proceed to a [continuing resolution] and a budget that balances in potentially 10 years—we think that plan is a good one.”

The measure, though, is only good for a few months, but gives lawmakers breathing room to try to hash out some kind of grander bargain that includes tax and entitlement reform. And who knows, maybe lawmakers will discover that lurching from crisis to crisis is no way to run a government.

“I think that what Republicans learned here,” said Mackowiak, “Is that unless we are willing to shoot the hostage, we shouldn’t take one at all.”