Ryan Keeps Debt Options Open in Wake of Competing Demands

By Jonathan Nicholson

House Speaker Paul Ryan (R-Wis.) said he is not forgoing any options in his quest to extend the Treasury Department’s borrowing authority before Congress takes its summer break in August.

Ryan’s comments came on the same day as the House’s second-ranking Democrat, Rep. Steny Hoyer (D-Md.), said Democrats are willing to support a hike in the debt ceiling, but only as long as it is not attached to objectionable “poison pill” policies. Hoyer also said he agreed with requests by Trump administration officials to deal with the issue before the August break.

The Treasury Department has been using various accounting maneuvers to avoid breaching the $19.809 trillion congressionally set limit since March, when the last suspension of the debt limit expired. Those measures, combined with the annual flood of spring tax revenue, are expected to allow the Treasury to keep selling debt and fund the government for some time.

How Republicans will navigate the process of again suspending the limit or even lifting it directly is unclear, especially as Republicans in recent years have been content to allow Democratic party leaders to bring most of the votes needed.

Ongoing Conversations

Ryan, talking to reporters June 7 after the House Republicans’ weekly party meeting, said he is keeping his options open.

“I’m not foreclosing any option at this time,” Ryan said. “We’re having those kinds of conversations, not with just our members, but with Democrats and with the other side of the Capitol Rotunda, over in the Senate.”

The debt limit would not be breached, Ryan said, though he declined to say when action must be taken to avoid that.

“We’re having long, ongoing conversations with our members about how to address this and we’ll address it before we hit the debt limit,” he said.

Democrats stand ready to vote for a “clean” boost with no controversial unrelated provisions attached, Hoyer said.

“My view is, and I’ve talked to the leader about this, Leader Pelosi and I both believe that if a clean debt limit extension were brought to the floor, that we would be telling our members that this is a responsible action for us to take, irrespective of other issues,” he said.

Hoyer did not rule out all unrelated provisions, but said they must not be “poison pill” ones. He said he had conveyed Democratic support for a clean hike to Republican leaders.

HFC Floats Prioritization

The House Democrats’ position is in contrast with that taken by the House Freedom Caucus (HFC), a group of conservative and libertarian House Republicans who held their weekly meeting late June 6.

“A clean debt ceiling is a non-starter,” HFC Chairman Rep. Mark Meadows (R-N.C.) said after the meeting. “At this point, we believe there are enough votes in the Republican conference to do a debt ceiling increase with conservative votes and certainly look at a debt prioritization structure that gets attached to it that would not require any spending cuts along with that.”

Republicans have long said threats of a government default in the event the debt limit was not raised in time have been overblown because the government could prioritize payments on Treasury Department debt even if it did not make payments on other obligations.

Democrats and many economists have said that approach would still be seen as a default by financial markets, which use Treasury debt as a benchmark for pricing the riskiness of other forms of debt.

“Once you don’t pay any bill that you owe, you have defaulted, whether it’s a salary, whether it’s a pension fund contribution, whatever it is,” Hoyer said.

Democrats would consider tying the debt limit to a tax package to be a non-starter as well, he said.

Meadows said he thought 60 votes—the amount needed to break a likely Democratic filibuster—could be found in the Senate for his group’s plan, though he did not specify how.

“I don’t think it’s appropriate for us to be doing [Senate Majority Leader] Mitch McConnell’s job over here in the House,” he said.

To contact the reporter on this story: Jonathan Nicholson in Washington at jnicholson@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

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