http://www.politico.com/news/stories/1009/28586.html
Dems seek cover to boost debt limit
The Senate must soon increase the national debt limit to above $13 trillion — and Democrats are looking for political cover.
Knowing they will face unyielding GOP attacks for voting to increase the eye-popping debt, Democrats are considering attaching a debt increase provision to a must-pass bill, possibly the Defense Department spending bill, according to Democratic and Republican sources.
Adding it to the defense bill would allow Democrats to argue that they voted for the measure to help troops in harm’s way — and downplay that their vote also expanded the limit for how much money the country can borrow.
The strategy has not yet been finalized, aides and senators said. The House already approved a debt limit increase of $925 billion — above the $12.1 trillion ceiling Congress approved as part of the economic stimulus package last February — but Democrats may seek to increase the limit further so they don’t have to revisit the politically treacherous issue until after the 2010 midterm elections.
As of Tuesday, the debt stood at $11.95 trillion, staring at senators amid a roiling health care debate in which critics have seized on the potential costs of the overhaul. Unlike those of the House, the Senate’s rules do not allow it to automatically increase the debt with its adoption of the annual budget resolution. That puts senators in a tough position politically. And if the Senate balks at the increase, Treasury Secretary Timothy Geithner has warned that the slow economic recovery could collapse, as investors around the world would sharply lose confidence in America’s abilities to meet its credit obligations.
“This president inherited, in some ways, an economic fiasco,” said conservative Democratic Sen. Mary Landrieu of Louisiana. “It’s not going to be a pleasant vote, but it may be necessary until we can get back on track.”
Indeed, Democrats are quick to point out that President George W. Bush left President Barack Obama with a $10.6 trillion debt — and that the debt limit was increased seven times in the Republican’s eight years in the White House. But now Democrats are in charge of Congress and the White House; and the Treasury Department reported last week that the annual deficit for the fiscal year that ended Sept. 30 stood at a record $1.4 trillion, with that number likely to balloon under Obama’s policies.
With the debt limit about to be eclipsed, Republicans are eager to force Democrats to find the votes to increase it among themselves, putting the majority party in a lose-lose situation and searching for a way to minimize public backlash.
“Regardless of the political treachery, I’m more worried about the economic treachery and the monetary aspects of it with devaluing the dollar,” said Sen. Ben Nelson (D-Neb.).
Senate Budget Committee Chairman Kent Conrad (D-N.D.) and the committee’s ranking member, Sen. Judd Gregg (R-N.H.), both told POLITICO that appropriators may add the language to must-pass spending legislation.
Senate Finance Chairman Max Baucus (D-Mont.), whose committee is in charge of the debt increase, said “oh yeah, it’s a possibility” of adding the debt-ceiling increase to the spending legislation.
“I care less how it’s done so long as it is done,” Baucus said.
And Conrad said he wants any debt increase to be coupled with language that would create a “comprehensive” process to force Congress to begin making tough choices to cut the debt — something akin to legislation he and Gregg proposed that would establish a commission to study ways to cut the deficit, whose recommendations would be fast-tracked through Congress.
Sen. Evan Bayh of Indiana, a centrist Democrat, said he wouldn’t support an increase in the debt limit “unless there’s some mechanism to start getting the deficit under control.”
Bayh and nine other Democrats sent a letter to Senate Majority Leader Harry Reid (D-Nev.) last week that called on Congress to approve a “special process” to control the deficit — warning that adding trillions more dollars to the country’s credit card could force a sharp rise in interest rates and cause the price of goods and services to decline while limiting the country’s ability to act on a range of pressing issues.
But if that language is attached to a stand-alone bill to increase the debt limit, the House would be forced to vote on the amended version — a vote that House Democratic leaders are eager to avoid. Folding a method to control the deficit — with an increase in the debt limit — into a much larger bill seems to be a more politically palatable solution, several aides said.
“Sen. Reid agrees about the importance of dealing with our long-term fiscal challenges and has been talking with Sen. Conrad, the administration and others in the Democratic leadership about the best way to proceed,” said Jim Manley, senior communications adviser to Reid. “Those discussions are ongoing, and the administration is evaluating what they may want to recommend.”
Republicans are keenly aware that Democrats may try legislative maneuvering to avoid political fallout, with one senior GOP aide saying the defense appropriations route was under “active consideration.”
Three Republicans — Reps. Jerry Lewis and Buck McKeon of California and Rep. Bill Young of Florida — sent a letter to House Appropriations Committee Chairman Dave Obey (D-Wis.) and Speaker Nancy Pelosi (D-Calif.) Wednesday asking Democrats to keep the defense bill clean of extraneous items, including the D.C. Voting Rights Act and an increase in the national debt limit.
A spokesman for Obey, Ellis Brachman, said he “couldn’t speculate on what will be in the final defense appropriations package,” which is awaiting action by a House-Senate conference committee.
Rob Blumenthal, a spokesman for Senate Appropriations Committee Chairman Daniel Inouye (D-Hawaii), declined to comment.
Since conference reports cannot be amended, the GOP wouldn’t be able to offer amendments to a debt ceiling increase if it’s added to the defense bill.
And GOP Senate leaders — who expect their 40 members to unite against the debt limit increase and force Democrats to find the necessary 60 votes on their own — are eager to have a protracted amendment process on the floor.
“My guess is that we will try to offer some amendments to [the increase] because I think it’ll be a good opportunity for us to have a debate on spending and borrowing, and that’s obviously a debate that we want to engage in,” said Sen. John Thune (R-S.D.), No. 4 in the GOP leadership.
Sen. Olympia Snowe (R-Maine), the Senate’s biggest swing vote, said she was uncertain how she’d vote on a debt limit increase.
“You absolutely have to make government run,” she said, “but I have to look at it.”
