Back on August 2–you know, a week ago–it looked like, maybe, raising the debt ceiling wouldn’t be impossible after all. Sure time was short, very short. There were only 12 working days when both houses of Congress were in session before Treasury Secretary Steve Mnuchin’s September 29 deadline for raising the borrowing limit for the Federal government. If Congress doesn’t raise the debt ceiling by September 29, Mnuchin has warned, the Treasury Department will no longer be able to pay all of the government’s bills. The best we could hope for in that case would be a selective default on Federal obligations.
But there was a ray of hope. Republican Mark Meadows, who heads the very conservative Freedom Caucus in the House of Representatives, said that while the caucus wants changes aimed at cutting government spending, it would not block a bill that doesn’t contain these conditions. The caucus, he said, wants to “get it done sooner rather than later.”
Well,today, apparently not so much so. The Freedom Caucus has raised the price for getting its support to pass any bill to raise the debt ceiling–and has intimated that any effort by House Speaker Paul Ryan to pass a bill without the conditions listed by the caucus with Democratic support would lead to a challenge to Ryan’s leadership position. Democrats, for their part, are suggesting that they have a price too for providing the votes needed to pass a debt ceiling bill.
This week Meadows told the Huffington Post that his caucus has proposed a menu of options to Ryan and the Republican leadership–include at least some of these in the debt ceiling bill or no votes for raising the debt ceiling. Options that Meadows mentioned include language in the bill to prioritize making Treasury debt payments ahead of other spending, casting into formal language in the bill the Trump administration’s informal one regulation in/two regulations out formula, and $250 billion in mandatory spending cuts.
It’s not clear to me if any or all of these options are deal breakers for Meadows and fellow conservatives, but they would, probably, make it impossible to push a bill through the Senate.
Which might leave Ryan looking to see if he can add enough Democratic votes to pass a bill in the House that stands a chance of passing in the Senate. It’s not clear why Democrats would be inclined to pull Ryan’s chestnuts out of the fire (other than a concern for the financial stability of the United States, that is). Democrats know that passing an increase in the debt ceiling will just clear the way for the Republicans to pursue their tax package and a new budget without significant input from the minority party. So it’s likely that Democrats are putting together their own list of options that they would demand in a debt ceiling bill in order to win their votes. Perhaps a legislative guarantee of funding to subsidize lower income customers in the Obamacare insurance pools. The Trump administration has threatened to withhold those payments to insurance companies–which would lead to even more insurers leaving Obamacare. Conservatives would certainly balk at this trade off, but the Democrats could bring Ryan enough votes to pass a debt ceiling bill without the Freedom Caucus.
Which is why Meadows and other conservatives are saying that if Ryan pushes through a relatively clean debt ceiling bill it would be the end of Ryan as speaker and the end of Ryan’s dream of tax reform. One conservative told the Huffington Post that if Ryan puts forward a clean debt ceiling increase “it becomes the start of the end for the Ryan speakership.” (Of course, killing Ryan’s tax reform proposals would probably mean killing any chance of a tax cut near and dear to conservative members.)
Another conservative told the Huffington Post that Ryan doesn’t understand that he’s endangering his tax reform proposal. “He’s not going to make it to tax reform if he doesn’t get through this,” the member said.
It’s not clear how much of this is posturing and how many, if any, of these threats are actually real enough to kill a debt ceiling bill. Until Congress comes back into session in September, everything is likely to remain vague and very fluid.
But meanwhile the clock is ticking. The last meeting on a debt ceiling deal, on August 1 ended with no discernible progress.