As Congress moves ever closer toward the deadline for raising the U.S.’s debt ceiling, there’s no immediate end in sight.
Treasury Secretary Jack Lew said in a letter to congressional leaders last week that the nation’s debt limit will need to be raised by Feb. 27, or the Treasury would begin to have trouble meeting all of its obligations on time.
House Republicans are formulating their final plan on the debt limit, including the possibility of attaching a “doc fix” on Medicare reimbursement rates and re-instituting some military benefit cuts from last year’s budget deal. But nothing is set in stone, House Republican aides said.
The irony in this debt ceiling fight is that, unlike almost every other fiscal battle since 2011, House Republicans don’t want a fight with President Barack Obama and congressional Democrats. Even the most raucous members of the caucus are urging leadership to avoid “theatre.”
But House Republican leaders have still not decided on a final strategy, and it leaves no room for the trial-and-error approach that has accompanied the last few debt-ceiling fights.
“We continue to believe there will not be a debt ceiling crisis; default is unthinkable,” Greg Valliere, an analyst at Potomac Research, wrote on Monday. “Republicans are eager to pass a relatively clean bill, but the timing is about to get tricky.”
The biggest opponent for Congress now is time. The House is only in session for three days this week. The next full day the House is in session is Feb. 26 — the day before Lew’s “drop-dead” date.
Ultimately, how most observers see this playing out is with a relatively “clean” debt-ceiling increase, without policy strings attached. That’s because even the fix in military pensions — which has broad bipartisan support — would contrast with some Republicans’ position against voting to raise the debt ceiling.
The way to resolve the impasse might be with a solution advocated by Rep. Raul Labrador (R-Idaho), who has proposed to put a “clean” bill on the floor and leave Democrats to pass the bill mostly on their own.
Still, the crunch for time has some analysts worried.
“We agree with the conventional wisdom that congressional Republicans are looking for a way to fold, but that path forward remains hazy and it is still possible for them to drown in the glass of water they have poured — and cause economic havoc by failing to raise the debt ceiling in time,” Chris Krueger, a D.C.-based analyst for Guggenheim Partners LLC, wrote Monday.
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