Senate Democrats poised for major battle on debt limit bill

Senate Democrats are vowing to stage a floor fight over a $781 billion increase in the federal debt limit as the two parties work to forge agreement on the structure of the debate.

“The Republicans better scrounge up some votes,” Senate Minority Leader Harry Reid (D-Nev.) said yesterday. “We’re not going to give them a pass on this.”

Democratic leaders hope to force Republicans to find the votes for the politically perilous debt-limit increase within their own caucus — votes that could be used against GOP lawmakers on the campaign trail.

Republican leaders plan to bring the bill to the floor next week, according to a senior GOP aide. But as of press time the two sides had not reached agreement on when or how the bill would be brought to the floor.

Debate over the debt-limit increase heightened as details of the Senate’s fiscal 2007 budget resolution, including another attempt to open the Arctic National Wildlife Refuge to oil drilling, began to leak out. The Budget Committee, which has decided to avoid a repeat of last year’s broad spending cuts, begins its markup today.

But the debt limit is a more pressing issue.

The Treasury Department has informed Congress that without additional borrowing authority the government would be thrown into default by the middle of the month. Congressional aides have suggested the department could use accounting tricks to forestall such a nightmare scenario.

Senate Republicans need assent from the Democrats to bring the bill to the floor without action by the Finance Committee but would prefer to limit amendments and time for debate on the issue.

Democratic leaders are eyeing three amendments, including one aimed at restoring pay-as-you-go budget rules on spending and tax cuts.

Several Republican senators said that, despite their discomfort with continuing deficits and mounting debt, they will vote to raise the ceiling to about $9 trillion.

“It still gives me heartburn,” said Sen. Jim DeMint (R-S.C.).

Sen. George Voinovich (R-Ohio), a fiscal hawk, said that he would support the debt-limit increase but that some Republicans might cast a “protest vote” against it.

“If everybody did it, God help us,” he said.

The House generated an automatic debt-limit increase when it voted on the fiscal 2006 budget conference report last April, and the Senate has been sitting on the measure ever since. Any changes to the existing bill would require a recorded vote by the House.

House Republican leaders want their Senate counterparts to clear the measure for the president without sending it back for a vote so that House members will be spared from giving opponents election-year fodder.

“I hope they’re successful,” said House Majority Whip Roy Blunt (R-Mo.).

The timing of the debt-limit increase may be uncomfortable for Senate Republicans as they begin the fiscal 2007 budget process today.

In a letter to Appropriations Committee Chairman Thad Cochran (R-Miss.) released last week, the Congressional Budget Office (CBO) estimated the president’s fiscal 2007 budget proposal would result in a $355 billion deficit if the full costs of military action in Iraq and Afghanistan are taken into account.

The CBO also estimated that policies proposed in the president’s budget would result in $873 billion in discretionary spending, compared with $842 billion in fiscal 2006. Almost all of the increase would come in the form of defense spending, according to the CBO.

Budget Committee Chairman Judd Gregg (R-N.H.) said yesterday that he would not deviate much from the administration’s target on discretionary spending.

“We’re going to try to stay as close to the president as possible,” he said.

Gregg indicated that the budget would again be used as a vehicle for the long-running effort to open the Arctic National Wildlife Refuge to oil drilling. But, he said, other proposals to curb mandatory spending through reconciliation “didn’t have the votes.”

House and Senate negotiators still must iron out the details of a $70 billion tax-cutting bill approved in last year’s budget. If they adopt a budget conference report first, the tax-cutting measure would be voided.