House GOP may seek short-term debt limit extension

DAVID ESPO

AP Spe­cial Correspondent

WILLIAMSBURG, Va. — House Repub­li­cans may seek a quick, short-term exten­sion of the government’s debt limit, a move that would avoid an imme­di­ate default by the Trea­sury as the party seeks to max­i­mize lever­age in nego­ti­a­tions over spend­ing cuts with Pres­i­dent Barack Obama this spring, offi­cials said Thursday.

“All options are on the table as far as we’re con­cerned,” Rep. Paul Ryan of Wis­con­sin said at a news con­fer­ence dur­ing a three-day retreat of the rank and file. He said pri­vate dis­cus­sions focused on how best to “achieve progress on con­trol­ling our deficits and con­trol­ling our debt.”

Ryan declined to say how long an exten­sion of the government’s bor­row­ing author­ity is under con­sid­er­a­tion, or what con­di­tions might be attached. Obama has said repeat­edly that he favors addi­tional deficit sav­ings yet he will not nego­ti­ate spend­ing cuts as part of an agree­ment to raise the cur­rent $16.4 tril­lion debt limit. Some Repub­li­cans have sug­gested they may seek unspec­i­fied reforms rather than reduc­tions, per­haps try­ing to force the Democratic-controlled Sen­ate to approve a budget.

The debt limit is one of three dead­lines that Con­gress and the admin­is­tra­tion will con­front this spring. Across-the-board spend­ing cuts begin in early March, and the gov­ern­ment runs out of fund­ing for many agen­cies and ser­vices on March 27. By con­trast, there is no fixed date for rais­ing the debt limit, since the Trea­sury has not yet noti­fied Con­gress when it will exhaust all other mea­sures to stay cur­rent with its bills.

Repub­li­cans gath­ered for their retreat at a secluded golf resort a two-hour-plus drive from the Capi­tol after an awk­ward begin­ning to the new Congress.

On Jan. 3, Rep. John Boehner of Ohio drew dis­sent­ing votes from nine fel­low Repub­li­cans in win­ning a new term as speaker, while one voted present and two abstained. Two days ear­lier, he had infu­ri­ated Repub­li­cans as well as Democ­rats from New York and New Jer­sey by post­pon­ing a vote on emer­gency relief aid for vic­tims of Super­storm Sandy.

Last Fri­day, the party’s rank and file over­whelm­ingly opposed the aid bill when it came to a vote, unhappy that it did not pro­vide for cuts else­where in the bud­get and as a result added to deficits. The $50 bil­lion mea­sure cleared on the strength of Demo­c­ra­tic sup­port, a highly unusual event given that Repub­li­cans con­trol the House.

At his news con­fer­ence Thurs­day, Ryan side­stepped when asked which would inflict the most harm on the econ­omy — imple­men­ta­tion of across-the-board cuts, a par­tial gov­ern­ment shut­down or a default.

“The worst thing for the econ­omy is for this Con­gress and this admin­is­tra­tion to do noth­ing to get our debt and deficits under con­trol,” said the party’s 2012 vice pres­i­den­tial can­di­date, back in Con­gress now as House Bud­get Com­mit­tee chair­man. “We think the worst thing for the econ­omy is to move past these events that are occur­ring with­out any progress.”

Pas­sage of a shorter-term increase in the debt limit would essen­tially shuf­fle the order of the loom­ing dead­lines. Rather than flirt with a first-ever default to get their way on spend­ing cuts — a strat­egy unlikely to win favor on Wall Street — Repub­li­cans might threaten a par­tial gov­ern­ment shut­down or allow across-the-board cuts to remain in effect.

Nei­ther is with­out poten­tial polit­i­cal fallout.

In par­tic­u­lar, Repub­li­cans paid a heavy polit­i­cal price for a pair of gov­ern­ment shut­downs in the 1990s. Yet the eco­nomic impact of a brief inter­rup­tion in some fed­eral ser­vices appears far less daunt­ing than the risk of an unprece­dented default that could desta­bi­lize finan­cial mar­kets at a time the econ­omy is remains short of full strength after the worst reces­sion in decades.

One Repub­li­can, Rep. John Flem­ing of Louisiana, told reporters there had been sev­eral pro­pos­als in the pri­vate dis­cus­sions to advance the Repub­li­can goal of cut­ting spend­ing while renew­ing the government’s bor­row­ing authority.

Among them is a require­ment for approval of a balanced-budget amend­ment to the Con­sti­tu­tion, a con­di­tion the Democratic-controlled Sen­ate would almost cer­tainly reject, or per­haps a watered-down require­ment for a mere vote on an amendment.

Posted by AP News on Jan 17 2013. You can follow any responses to this entry through the RSS Feed. Comments can be made below.