House Republicans advanced a contentious bill aimed at preventing a catastrophic default on the nation’s debt regardless of whether Congress raises the debt limit.
The House Ways and Means Committee approved legislation in a party-line vote that would exempt payments on the nation’s public debt and Social Security from the borrowing cap. The change, according to GOP proponents, would ensure that the most damaging aspects of failing to raise the debt limit would be averted, allowing for a more reasoned debate on the topic.
{mosads}“All this does is say the federal government is not going to default on its bonds,” Chairman Paul Ryan (R-Wis.) said. “If you don’t want the government to default on its bonds, vote for this bill. If you want to play with fire, and you want to tempt fate by possibly having default, then vote against it.”
But Democrats dismissed the bill out of hand, saying it ignored the host of other problems caused by not raising the debt limit. Critics of a prioritization plan such as Ryan’s, both on and off Capitol Hill, have questioned whether it is feasible and note that there would still be significant economic damage.
Rep. Sandy Levin (Mich.), the top Democrat on the panel, called the measure “reckless and indefensible.”
“This is not a bill to address the budget deficit or reduce our national debt. It is a bill setting forth a plan for not paying for obligations that Congress has already authorized,” he said.
But by pushing ahead such legislation, Republicans are already beginning to lay the groundwork for a major policy of the fall. The Treasury Department estimates that sometime after October, Congress will need to raise the $18 trillion borrowing cap to ensure the government can continue paying all its bills on time.
In past debt-limit battles, Republicans have tried to push a prioritization approach, which they said would eliminate the most damaging effects of inaction: an unprecedented default on U.S. debt, often treated worldwide as most stable form of investment. Meanwhile, the White House has dismissed such approaches in the past as unworkable and insisted that the predicted consequences are too severe to subject the debt limit to political horse trading.
Currently, lawmakers are working to come up with a funding measure to avoid a government shutdown at the end of September. One possibility is that lawmakers craft a short-term funding bill to last until close to year’s end, when presumably a debt-limit boost and a longer-term funding measure could be wrapped into a final package.
Outside experts believe the government will need a borrowing boost sometime in November or December.
In addition to the prioritization bill, the Ways and Means Committee also passed a measure that would order the Treasury secretary to testify before the panel shortly before a debt-limit increase is required. The secretary would have to detail the nation’s overall fiscal picture and trajectory, as well as provide a set of recommendations from the president on how to address the national debt going forward.
That bill also passed down a party-line vote, with Democrats calling the measure unnecessary.