A senior Republican aide said that the party's leaders in the
Republican-controlled House of Representatives are in "listening
mode" and seeking ideas from rank-and-file lawmakers.
The options range from demands for expanded offshore energy
production to small tweaks in President Barack Obama's healthcare
law to approval of the Keystone XL oil pipeline. Another idea put
forth would involve overhauling federal job-training programs, an
element in a House Republican jobs bill that has gotten no traction
in the Democratic-controlled Senate.
"If the president is asking for a blank check, we're not going to do
that," said Representative Luke Messer, an Indiana Republican who
serves on the House Budget Committee.
"I won't support a debt limit increase unless it is partnered with
policies that will either reduce the deficit or help grow the
economy," he added.
Obama and congressional Democrats have vowed not to negotiate over
raising the debt limit, arguing that it is Congress' responsibility
to ensure that its spending obligations can be paid.
"We will not negotiate over whether or not the United States of
America should pay its bills. And once again, before they get any
further down this damaging path, we call on our Republican
colleagues to not play politics with our economic recovery," Senator
Patty Murray, chairwoman of the Senate Budget Committee, said in a
letter to colleagues on Friday.
After last fall's government shutdown battle and two subsequent
bipartisan fiscal deals, Republicans are focusing on demands that
they believe Democrats might support. For example, a proposal to get
rid of a tax on medical devices has garnered Democratic support in
the past, though attaching it to the debt limit legislation would
make it more controversial.
Representative Tom Price, a conservative Republican from Georgia,
said he also would like to see other adjustments to Obama's landmark
2010 healthcare law considered as part of the debt limit debate,
including to the so-called "risk corridor" provision that
compensates insurers if they wind up with an especially unhealthy
and costly mix of customers under the program.
"Nobody is interested, on our side of the aisle at least, in bailing
out insurance companies. I would hope that the president isn't
interested in bailing out insurance companies, and (Senate Majority
Leader) Harry Reid isn't, so maybe there's some common ground
there," said Price, who is a physician.
LISTENING TO MEMBERS
House Republicans will formulate their conditions for an increase in
U.S. borrowing authority next week at a retreat in Cambridge,
Maryland, a Chesapeake Bay resort town.
House Speaker John Boehner has recently softened his tone, calling
last week for swift action by the House and Senate to raise the debt
limit, and saying that the United States "shouldn't even get close
"No one wants another market-rattling showdown, but, at the same
time, a 'clean' increase can't pass the House, or — most likely — the Senate," said a House Republican leadership aide who requested
What House Republicans aren't talking about so far are demands for
major cuts to the federal benefits programs known as entitlements — Social Security, Medicare and Medicaid — which are widely viewed as
the biggest contributors to future debt growth.
Obama and Democrats have successfully resisted changes to these
programs through three years of fiscal showdowns, and Republicans
appear to be changing tactics.
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Still, it's unclear whether Democrats will accept even scaled-back
Republican demands on the debt limit.
A senior Senate Democratic aide said Congress should simply increase
the debt limit so that the United States can pay its bills on time.
"There are no talks whatsoever about considering any ransom demands
from Republicans. Republicans are having this conversation entirely
with themselves," the aide said, speaking on condition of anonymity.
On Wednesday, Treasury Secretary Jack Lew sought to raise pressure
on Congress for swift action, saying the government would exhaust
its borrowing capacity by late February.
As part of the deal that ended the shutdown last October, Congress
suspended the debt ceiling until February 7. The Treasury can employ
extraordinary cash-management measures to stave off default, but
these won't last long, because February is traditionally a big
deficit month as tax refunds are paid out.
The debt-limit fights have proven costly in the past, helping the
United States lose its top-tier credit rating from Standard and
Poor's in 2011.
While it was unclear how close the Treasury came to a debt default
last October, financial markets showed clear signs of stress, in
some cases shunning what has traditionally been regarded as the
safest, most liquid security on the planet: short-term U.S. Treasury
Some banks and money markets refused to accept some Treasury bills
as collateral for short-term loans, disrupting the $5 trillion
repurchase market, a key source of day-to-day funding for the
financial system. Prices fell, pushing yields on one-month Treasury
bills up to levels not seen since the depths of the 2008 financial
But the latest showdown, coupled with Congress' ability to pass
budget legislation over the past two months, may have set the stage
for smaller, more manageable disagreements.
Steve Bell, a former Republican Senate Budget Committee staff
director who is now with the Bipartisan Policy Center, said he
believes debt limit demands will be "minor" and there is a good
chance for other legislation, such as immigration reform, to take a
more prominent role in Congress this year.
"I really think we have a chance this year to be really calm on the
fiscal front," Bell said.
(Reporting by David Lawder; additional reporting by Eric Beech;
editing by Caren Bohan, Jonathan Oatis and Paul Simao)
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