In a concession to President Barack Obama and Democratic lawmakers, House Speaker John Boehner said Tuesday the House will vote to increase the government’s borrowing cap without trying to attach conditions sought by some Republicans. “We’ll let his party give him the debt ceiling increase that he wants,” Boehner said, hours before the expected evening vote.
Boehner announced the plan after a poll of Republican members found insufficient support for a strategy that would have made passage of the debt limit increase conditional on a plan to reverse a recently passed cut to military pensions. Obama and congressional Democrats argued the GOP should not try to use a vote on the debt limit to extract concessions from the administration.
“We’ll let the Democrats put the votes up,” the speaker said. “We’ll put a minimum number of (GOP) votes up to get it passed.”
He said he expected almost all of Obama’s Democratic allies to vote for the so-called clean debt cap increase but he would be one of the few Republicans to back it as well.
Boehner’s announcement came after a plan hatched on Monday to reverse the cut in military pensions as the price for increasing the government’s borrowing cap got a rocky reception from skeptical conservatives.
“Right now we’ve got a debt ceiling bill that increases spending, which is diametrically 180 degrees opposite of what we were battling over just two years ago – where the question was how much in spending cuts we were going to get,” said Rep. Mo Brooks, R-Ala.
Now, rather than trying to win over unhappy Republicans for the debt ceiling vote, Boehner will rely on Democrats to pass a “clean” increase in the borrowing cap through March of next year. GOP leaders had earlier attempted to build support for plans to tie a debt cap increase to approval of the Keystone XL pipeline or repeal of part of the new health care law; both those efforts fell flat as well. He said his inability to assemble 218 GOP votes – enough to win a floor vote – for any debt limit plan left him no alternative but to turn to Democrats.
“When you don’t have 218 votes, you have nothing. We’ve seen that before and we see it again,” Boehner said, adding that House Minority Leader Nancy Pelosi, D-Calif., promised him sweeping Democratic support in Wednesday’s vote.
The White House applauded the move. Gene Sperling, director of the White House’s National Economic Council, said the administration hopes Tuesday’s development means “that the tactic of threatening default or threatening the full faith and credit of the United States for budget debates is over, off the table and never is going to happen again. And if so that would, I think, be a boost for confidence and investment in the US.”
The announcement amounted to a bitter defeat for a party that has sought to use must-pass debt ceiling measures as leverage to force spending cuts on Democrats. Republicans won more than $2 trillion in spending cuts in a 2011 showdown, but gave Obama two debt limit increases last year with only modest add-ons.
The House now plans a separate vote on the military pensions. The cuts, just passed in December, would reduce by one percentage point the cost-of-living pension increases for military retirees under the age of 62. They were backed by House Budget Committee Chairman Paul Ryan, R-Wis. Repealing them would cost $7 billion over the coming decade, the Congressional Budget Office said Monday.
The reduction has sparked an uproar among advocates for veterans, and lawmakers in both parties want to repeal it.
In fact, the Senate voted 94-0 on Monday to advance a repeal of the military cost-of-living cuts, though Democrats and Republicans still disagree over whether to replace the pension curbs with cuts elsewhere in the government’s $3.5 trillion budget.
Time is running out for lawmakers to act to lift the debt limit. Treasury Secretary Jacob Lew told lawmakers last week that Treasury will exhaust by Feb. 27 its ability to employ accounting maneuvers to borrow to pay its bills.
Lew told congressional leaders Monday that he had begun tapping two large government worker retirement funds to clear room under the debt limit. The action involving the Civil Service Retirement and Disability Fund will provide $50 billion to $75 billion in additional borrowing room, while tapping the Government Securities Investment Fund will provide about $175 billion in borrowing room, Lew estimated.
Lew announced he would suspend payments to these two pension funds and would also draw down investments made in the funds. Previous Treasury secretaries have also employed this bookkeeping maneuver. Once Congress approves a new debt ceiling, the Treasury makes the funds whole by replacing the withdrawn funds and lost interest earnings.
Raising the limit is needed so the government, which ran a $680 billion deficit last year, can borrow enough to pay all its bills, including Social Security benefits, interest payments on the accumulated debt and government salaries. Both Democrats and Republicans agree that failing to do so could spark a disaster in financial markets.