Republicans Starting to Chill About Debt Ceiling

WASHINGTON, DC - OCTOBER 12: Sen. Bob Corker (R-TN) speaks to reporters before going into the Senate Chamber to vote, on October 12, 2013 in Washington, DC. The shut down is currently in it's 12th day.  
National Journal
Michael Catalini
Jan. 22, 2014, 3:30 p.m.

Des­pite be­ing adam­antly op­posed to hik­ing the debt ceil­ing without spend­ing cuts, some Re­pub­lic­ans are show­ing signs of sur­render on the is­sue.

While House Re­pub­lic­ans will meet next week and Sen­ate Re­pub­lic­ans are plan­ning to meet early next month to dis­cuss strategy, in­clud­ing on the debt ceil­ing, there’s deep skep­ti­cism that they can win cuts from Demo­crats.

“I just think it’s un­for­tu­nate, very dis­ap­point­ing to me, but I think the air’s out of the bal­loon on fisc­al is­sues,” said Sen. Bob Cork­er, R-Tenn., soon after vot­ing against the om­ni­bus spend­ing bill.

Cork­er poin­ted to the gov­ern­ment shut­down and debt-ceil­ing show­down in Oc­to­ber as reas­ons for his doubts about be­ing able to re­duce fed­er­al spend­ing. Those epis­odes proved polit­ic­ally costly to Re­pub­lic­ans in pub­lic polling, and left Demo­crats feel­ing em­boldened about their strategy of re­fus­ing to ne­go­ti­ate on the debt lim­it.

Polling in­dic­ates just how dicey the debt ceil­ing can be. The pub­lic re­cog­nizes that rais­ing the debt ceil­ing is im­port­ant for the eco­nomy, but many Amer­ic­ans also say they real­ize how prob­lem­at­ic debt is — even though the lim­it rep­res­ents debts Con­gress has already in­curred.

Some in­siders are sug­gest­ing the pub­lic might be tired of the brink­man­ship that’s re­volved around re­cent fisc­al de­bates.

“The debt-ceil­ing fight has be­come old hat to most voters,” said Terry Holt, a former aide to House Speak­er John Boehner. “And Chick­en Little has been on the go for some time now.”

An Oc­to­ber sur­vey from Pew Re­search showed that 51 per­cent of Amer­ic­ans thought it was es­sen­tial to raise the debt lim­it. But an­oth­er sur­vey, an NBC/Wall Street Journ­al poll from late last year, showed that 44 per­cent did not want to raise the debt lim­it.

Clearly still frus­trated over the de­fund-Obama­care strategy that his col­leagues — primar­ily Sen. Ted Cruz of Texas — pur­sued, Cork­er lamen­ted that Re­pub­lic­ans shif­ted the sub­ject away from fisc­al is­sues, sab­ot­aging any lever­age this time.

“I just don’t feel it,” Cork­er said. “I was in­volved all sum­mer with the White House. Then we had the shut­down this fall, which let’s face it, took us away from fisc­al is­sues.”

The Re­pub­lic­an po­s­i­tion con­trasts sharply with that of Demo­crats. Sen­ate Ma­jor­ity Lead­er Harry Re­id, for ex­ample, has already be­gun beat­ing the no-ne­go­ti­ation drum. In his re­cent meet­ing with Sen­ate Demo­crats, Pres­id­ent Obama was “ex­tremely em­phat­ic” that he will not bar­gain with Re­pub­lic­ans over hik­ing the debt lim­it, Re­id said.

Boehner, for his part, did not rule out passing a debt-lim­it ex­ten­sion.

“How many times have we talked about this?” Boehner asked re­cently. “Listen, the pres­id­ent has not only made clear that he will not ne­go­ti­ate on the debt lim­it, he has also made clear, as have Demo­crats here on Cap­it­ol Hill, that they won’t talk about our long-term spend­ing prob­lems un­less the Re­pub­lic­ans are will­ing to raise taxes,” he said.

Re­pub­lic­ans, Boehner went on to say, won’t raise taxes. But left un­said was wheth­er the GOP will agree to a hike without spend­ing cuts.

That’s an ar­gu­ment that might not be worth hav­ing, with Demo­crats already in­dic­at­ing such cuts are off the table and some Re­pub­lic­ans real­iz­ing they can fare bet­ter with voters if they fo­cus on Obama­care.

“Pick­ing smart fights is bet­ter for keep­ing the ma­jor­ity,” said Kev­in Mad­den, a former aide to GOP pres­id­en­tial can­did­ate Mitt Rom­ney. “I think Boehner will make the case that a pro­ced­ur­al show­down over the debt lim­it isn’t a smart fight.”

Boehner spokes­man Mi­chael Steel, though, said a so-called clean debt-lim­it in­crease won’t pass the House, sug­gest­ing Demo­crats would have to budge.

It’s just not clear what ex­actly Re­pub­lic­ans can ex­tract from the White House and Re­id on the debt ceil­ing. Sen­ate Re­pub­lic­ans have sug­ges­ted re­form­ing the tax code or re­du­cing the reg­u­lat­ory bur­den as pos­sible trad­ing pieces.

“We’ve got to get in­to re­forms, re­forms of our man­dat­ory spend­ing pro­grams,” said Sen. John Ho­even, R-N.D. “So people go, ‘Well here comes the debt-ceil­ing is­sue again, we’ve got to have an agree­ment.’ “

But there has been little in­dic­a­tion from lead­ers on the Hill that will hap­pen, and with the re­cent budget deal, some are sug­gest­ing law­makers won’t find op­por­tun­it­ies for com­prom­ise on such short no­tice.

“This is a time for be­ing real­ist­ic about what de­mands we can ex­act,” Mad­den said.

Cer­tainly, Wall Street seems to ex­pect that law­makers won’t cause an elec­tion-year stir over the debt ceil­ing this winter.

“We ex­pect an­oth­er sus­pen­sion of the debt ceil­ing without a ma­jor fight,” Mor­gan Stan­ley told its cli­ents, ac­cord­ing to The Wall Street Journ­al.

While the le­gis­la­tion passed last year ex­ten­ded the $17 tril­lion lim­it un­til Feb. 7, when pre­cisely the Treas­ury will hit the ceil­ing is not clear. Last week Treas­ury Sec­ret­ary Jac­ob Lew said he be­lieves it will come in Feb­ru­ary.

Law­makers will have to ad­dress the is­sue, viewed as must-pass le­gis­la­tion, in a tight time frame, with Con­gress out this week and back for three weeks be­fore the weeklong Pres­id­ents Day break.

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