The Hill: No decisions on demands as House GOP talks debt ceiling

The Hill - Erik Wasson and Russell Berman

House Republicans discussed a wide variety of budget-cutting proposals to link the raising of the nation’s debt ceiling during more than two-hour conference meeting on Wednesday.

The meeting was the first dedicated to the next major Washington fiscal showdown but rosier deficit numbers took some urgency out of the debate, members said.

Members came away with the impression that the GOP conference wants entitlement cuts to be demanded along with any possible links to a pro-growth overhaul of the tax code.

No decisions were made on what the House GOP will demand in exchange for the raising of the debt ceiling this fall and the next step appears to be further listening sessions on the topic.

“It was a good first meeting,” Rep. Tom Cole (R-Okla.) said.

“The opinions were as diverse as you might expect them to be, the challenge will be to find that sweet spot of agreement,” Rep. Rob Woodall (R-Ga.) said. “We didn’t talk timeline…building consensus here and building consensus across the country is a time consuming process.”

The meeting came amid word from the Congressional Budget Office that the deficit is shrinking more rapidly than expected, buying lawmakers more time to deal with the next debt ceiling hike.

The CBO on Tuesday estimates that the deficit this year will be $642 billion, more than $200 billion less than it thought three months ago. Because of increased revenue, the U.S. will be able to take extraordinary measures to avoid hitting the $16.4 trillion debt ceiling until October or November, CBO said.

Still, Republicans said they want to act by the summer to avoid worrying financial markets and to draw Democrats into a negotiation that could lead to a broader budget deal.

“The CBO provides a little more time to have a thoughtful conversation, but I don’t sense anyone wants to run this up to the last minute, I think the whole reason for the meeting is to identify our priorities early and get it out of the House early,” Rep. Kevin Brady (R-Texas) said.

Battles over raising the debt ceiling have largely defined the current Republican House majority.

In 2011, a standoff between Republicans and Democrats took the nation to the brink of a first-ever payments default and led to the downgrading of the U.S. AAA credit rating by Standard and Poor’s.

In January, after a deal was struck between the Republican leadership and conservative leaders, the House voted to suspend the debt ceiling until May 19.

The deal required that both chambers passed a budget resolution under the threat of having pay withheld.

Boehner has said that the principle he laid out in 2011 – that any increase in the debt limit must be accompanied by equivalent or greater spending cuts or reforms – still holds, even though it did not in January.

Republicans are now considering a wide range of options, from tying the debt limit to tax reform to non-fiscal issues like approval of the Keystone oil sands pipeline or repeal of the 2010 healthcare law.

The goal of the debate, aides have plainly said, is to find 218 votes to raise the debt ceiling and put pressure on Senate Democrats and the White House.

“What do our members believe is necessary in order to allow them to vote yes in increasing the debt limit?” Boehner asked at a press conference last week, highlighting the question at the heart of the debt-limit discussions.

Citing the negative consequences of the last standoff, Obama has refused to negotiate again over the debt limit, arguing that Congress must simply act to authorize the payment of bills it has already incurred.

Obama said he is willing to negotiate a budget deal separately that includes a mix of tax increases and spending cuts, but Boehner has rejected any new tax increases.

The House last week passed a bill pushed by conservatives to authorize the Treasury to prioritize payments in the event the debt ceiling is breached. Senate Majority Leader Harry Reid (D-Nev.) said the bill has no chance of passage in Senate, and Obama has threatened a veto.

Online: The Hill