WASHINGTON – House Republicans, once bent on again tying an increase in the federal debt ceiling to cuts in spending, punted on both issues Wednesday, passing a bill that lifts the debt limit for four months but at the same time threatening to withhold congressional pay unless lawmakers pass a budget.
The bill, which passed in a 285-144 vote, defuses what just weeks ago seemed to be a time bomb aimed at the American economy. Economists worried that if Congress did not raise the debt ceiling and instead allowed America to default on its debts next month, higher interest rates and an economic downturn would result.
Now none of that is likely to happen, at least in the short term. The Obama administration and Democrats who control the Senate have signaled that they will not oppose the temporary suspension of the debt ceiling, meaning that it is likely to become law shortly.
Still, the bill produced its share of intrigue in the House, with the majority of Republicans – including Rep. Chris Collins, R-Clarence – turning tail on a debt-ceiling confrontation they had promised, and Democrats such as Rep. Brian Higgins of Buffalo splitting with the party leadership that had urged the measure’s defeat.
With the United States set to surpass its $16.4 trillion borrowing limit next month, Republicans at first had insisted that any increase in the limit be accompanied by corresponding cuts in spending.
“About the only leverage the Republicans have is the debt limit,” Collins said three weeks ago.
Stung, though, by a loss in the presidential election and historically abysmal poll numbers, the House GOP changed its approach.
Explaining the switch, Rep. Tom Reed, R-Corning, said “the American people may not agree” with the previous Republican approach of using the debt ceiling as a bargaining chip.
Meanwhile, Collins said: “Republicans felt … that this was not the day to draw the line in the sand and battle on what we know is needed in terms of spending cuts and in doing so put the country in jeopardy of going into default.”
He noted that a series of coming deadlines will provide a better opportunity for Republicans to spell out their argument that deep spending cuts are needed to avoid driving the nation perilously into debt.
First, some $1.2 trillion in draconian cuts that Democrats and Republicans alike want to redraw are set to take effect March 1 as part of the recent “fiscal cliff” deal.
Second, funding for many current-year programs will expire March 27, meaning that legislation must be passed by then to fund them for the rest of the fiscal year, which ends Sept. 30.
Next, Congress is supposed to pass a budget for the next fiscal year by April 15 – and under the legislation that the House passed Wednesday, lawmakers will have guns to their heads to force them to do so. The bill would withhold the pay of House members and senators unless a fiscal 2014 budget plan is passed by that deadline.
“All families and businesses have a budget, yet it has been nearly four years since the Senate passed one,” Reed said. “It’s a gross failure of one of the most basic functions of governing, and now it is time for the Senate to step up and join the House to pass a budget. We need the Senate to do their job, pass a budget, and live by it.”
The House is planning to prepare a budget that would come into balance in a decade – down from 30 years under the spending plans produced the last two years by House Budget Committee Chairman Paul D. Ryan, R-Wis.
And that’s good news to Collins, who proposed during his campaign for Congress that the budget be balanced in 10 years.
“Leadership listened to the conservative side of the party, and there are enough of us that they came forth” with the 10-year budget-balancing commitment, “and I don’t think it took any arm-twistiing,” Collins said.
Big changes in Social Security and Medicare are sure to be part of that 10-year plan, Collins said – and that’s just what worries Higgins.
“They’re going to destroy Medicare, and they’re going to destroy Social Security, because they have to” in order to balance the budget that fast, Higgins said.
While disagreeing vehemently with the Republicans’ long-term budget plans, Higgins voted for the Republican bill to suspend the debt ceiling through May 18.
“It’s a distraction. It’s not worth fighting,” Higgins said of the bill. “It’s not perfect, but it’s better than the uncertainty that otherwise would occur between now and May.”
The temporary suspension of the debt ceiling split the House Democratic Caucus, with 86 members favoring it and 111 voting against it.
Democratic leaders had recommended that lawmakers oppose the measure.
“It is a gimmick unworthy of the fiscal and economic challenges that we face,” said House Minority Leader Nancy Pelosi, D-Calif.
“This bill kicks the can down the road for 90 days. One more time,” said House Minority Whip Steny H. Hoyer, D-Md.
“This bill simply puts a leverage point, another 90 days away, so that we can continue to roil this Congress, roil this country, and roil our people and our economy.”
But it’s a gimmick, Higgins said, that gets the GOP out of a bind that it put itself into with its unprecedented 2011 decision to start using the debt ceiling – which long had been raised routinely – as leverage in budget negotiations.
“I think they’re beginning to realize that the damage [in doing so] is not being inflicted on the opposite party,” Higgins said. “It’s being inflicted on the American people and the American economy.”