Talking Points: Raising the Debt Ceiling Before February 27
- Yes, we just had this issue in October, but the debt ceiling wasn't raised--just suspended: When the government shut down over the debt limit impasse last October, the end result was that Republicans voted on a resolution to suspend the debt ceiling, not raise it by a dollar amount, until February 27. This was only the second time in history the debt ceiling had been suspended, the first time being earlier last year. Since 2012, with the debt limit having been suspended twice, the deficit increased by $900 billion.
- What's the difference between raising the debt ceiling and a debt ceiling suspension? By raising the debt ceiling by a dollar amount, the Treasury Department cannot borrow more than the amount set. When that amount is reached, Congress is forced to have a debate about raising the debt ceiling again and by what amount. By suspending the debt ceiling, Congress picks a date on a calendar after which the debt ceiling has to be either raised by a dollar amount or suspended until another assigned date. As we saw last year, when the debt ceiling is suspended it allows the Treasury to borrow without a set limit and it can end up borrowing more than it usually does when the debt ceiling has been established by a dollar amount.
- Offer: With the debt limit date looming and the House planning to go on a two week recess, on Monday night Speaker of the House John Boehner (OH) proposed a plan to raise the debt ceiling in exchange for a reversal of a $6 billion cut to military pensions signed into law in the budget agreement three months ago. He is eager to get a deal passed before the House goes on recess.
- Rebuttal: A clean resolution is what House Democrats have been pushing for, with an aide for House Democratic Leader Nancy Pelosi (CA) telling The Hill, "that 'the unified Democrat position' is a 'clean' debt-ceiling increase without conditions. He said the party is willing to discuss the pension fix as a stand-alone bill only."
- Counter-Offer: Tuesday morning, February 11, Speaker Boehner's office revealed that the Speaker will bring forth a "clean" resolution raising the debt ceiling, without attaching policy items to the resolution. This is a reversal of his decision the night before.
- 218: Speaker Boehner could afford to lose just 15 House Republican votes on any debt ceiling resolution he proposes without relying on Democrats in the House to vote for his resolution. Seeing the difficulty of reaching the 218 votes necessary to pass the resolution he proposed last night, he offered the clean resolution this morning. It is almost a certainty that conservative Republicans will not vote for the clean resolution but it will pick up Democrat votes.
- Result: The vote in the House on the clean resolution will take place Wednesday morning. It is likely that the continued borrowing authority will be granted to Treasury with little fanfare; a muted affair after October's government shutdown. But at what cost? That will be clear in a few months.
In Case You Missed It
Senator Cruz addressed the Conservative Policy Summit organized by the Heritage Foundation yesterday on America's energy renaissance. Watch the speech here:
|Sen. Ted Cruz at 2014 Conservative Policy Summit: An American Energy Renaissance|