WASHINGTON — House Speaker John Boehner announced today that the House will vote this week to increase in the government’s borrowing cap without any add-ons demanded by Republicans.
This move amounted to a capitulation by Republicans to President Obama and Capitol Hill Democrats who argued that the GOP should not attempt to use the must-pass increase in the so-called debt limit as leverage to extract concessions from the administration.
Boehner announced the plan after a poll of the Republican rank and file failed to show enough support for a strategy aimed at tying the hike in the debt limit to a plan to reverse a recently passed cut to military pensions.
“We’ll let the Democrats put the votes up. We’ll put a minimum number of (GOP) votes up to get it passed,” Boehner said. “We’ll let his party give him the debt ceiling increase that he wants.”
The Ohio Republican said he expected virtually all of Obama’s Democratic allies to vote for the so-called clean debt cap increase but that he would be one of the few Republicans to also back it in a vote on Wednesday.
Boehner’s announcement came after a plan hatched on Monday to reverse a recently passed cut to 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 on Wednesday to pass a “clean” increase in the borrowing cap through March of next year.
“I would expect virtually every Democrat to vote for it,” Boehner said, adding that House Minority Leader Nancy Pelosi, D-Calif., promised him sweeping Democratic support.
Today's developments amount 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.
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.
Lawmakers temporarily suspended the borrowing limit last October in an agreement that ended a government shutdown and extended the federal borrowing limit. With a fresh extension of borrowing authority now needed again, the GOP debt limit plan is likely to employ the same approach and suspend the debt limit through early next year.
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.