Avoiding the Brink

Congressional Republicans Are Scrambling for a Debt-Ceiling Workaround

With a deadline looming, the GOP is exploring crafty ways to avert the economic crisis that is inching closer.

Six weeks before the government is set to run out of money to pay its bills, congressional Republicans are trying to cobble together an agreement to skirt a dramatic showdown within their own caucus.

Four Republican congressional sources told The Daily Beast that GOP lawmakers have explored attaching a “clean” increase of the debt limit to an unrelated, popular, potentially-bipartisan piece of legislation rather than vote on it as a stand-alone measure.

This approach has been used non-controversially in the past, usually via spending bills. But in recent years, conservative lawmakers have tried to use the prospect of a debt-ceiling-triggered default, and the potentially massive economic consequences that come with it, to secure domestic spending cuts.

Republican leaders are now trying to find a way to win over enough lawmakers to prevent that standoff. But the problem they face is finding the type of legislation that would both serve as a vessel for lifting the debt ceiling, and be so agreeable that the House’s influential bloc of around three dozen conservatives, the Freedom Caucus, won’t try to block it.

The party could ultimately end up passing such a measure with the help of Democratic votes. But doing so would risk inflaming intra-party tensions at a time when GOP leadership is already finding it difficult to keep those tensions in check. The government reaches its federal borrowing limit at the end of September.

The efforts by Republicans to find a debt ceiling work-around is another reflection of the diminished leverage that the Freedom Caucus has heading into the potentially bruising fight. Already, the Trump administration has said it wants Congress to pass a clean, no-strings-attached debt ceiling hike, with Treasury Secretary Steven Mnuchin explicitly conveying this message to the Freedom Caucus during a meeting in July. (An aide told The Daily Beast that Mnuchin faced strong pushback.)

Moreover, GOP leadership has signaled that it, too, wants a drama-free resolution to the debt ceiling debate. Earlier this summer, Republican leaders explored attaching a “clean” debt ceiling hike to a Veterans Affairs reform bill, according to two aides and one lawmaker who requested anonymity to reveal private negotiations. But they ultimately passed the bill through without that provision, and Trump signed it into law in June.

Further complicating matters for GOP leadership is that the debt ceiling hike isn’t the only tough vote that they will have to take once they return from the August recess. The party is considering passage of a new authorization of Obamacare subsidies that health care officials say are instrumental for the individual market, and which most GOP senators have said they’d support. It will be a heavy lift to get those cost-sharing-reduction (CSR) payments through the House on top of a request for a debt ceiling hike.

One concern among conservatives in the chamber is that the two measures—a debt ceiling hike and continuation of the CSR payments—will be thrown into the same legislative package with the goal of ramming it through the chamber with, potentially, bipartisan support. Freedom Caucus members would strongly oppose it.

“Think about how wrong that would be. That’s increasing the credit card limit, at the same time you’re increasing spending, and also, by the way, you’re going to throw in a bailout for the insurance companies. I don’t think that makes a lot of sense,” Rep. Jim Jordan (R-OH), a Freedom Caucus member, told The Daily Beast in an interview.

On the other end of the spectrum, Rep. Charlie Dent (R-PA), a member of the moderate Tuesday Group caucus, urged Congress to take a holistic approach to addressing these deadlines. He encouraged lawmakers to come up with a bipartisan, bicameral budget agreement to which they could attach a clean debt ceiling increase; all before the end of September.  

“I would do those things together,” Dent said in an interview. “If history is any judge, too often our leadership tries to make it easier for the no votes rather than the yes votes, when it comes to the debt ceiling.”

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The likelihood of lawmakers being able to accomplish all of that, however, seems slim. Major, substantive disagreements remain apparent within the Republican party and even non-Freedom Caucus members, like Rep. Tom Cole (R-OK), have said they would likely defy the Trump administration’s request for a clean debt ceiling hike. Beyond that, there are only 12 legislative days in September before the debt limit is reached.

“That’s what’s so frustrating. I thought there was actually going to be part of the time in August that we were going to be there,” Jordan said. “And voters find that just ridiculous. And it’s why we should’ve stayed. So when we get back, we’ll see.”