As of today, the Treasury will no longer have the authority to issue bonds as necessary to pay the government’s bills. Treasury Secretary Jack Lew said this week that the government will run short of cash to pay its bills by the end of this month unless Congress grants additional credit authority. “Unlike other recent periods when we have had to use extraordinary measures to continue financing the government, this time those measure will give us only a brief span of time,” Lew said. “Given these realities, it is imperative that Congress move right away to increase our borrowing authority.” This is the fourth debt ceiling standoff in three years.
The House conservative bloc remains uneasy with any legislation that would extend the borrowing limit, but this standoff appears to be taking place in an apparent atmosphere of caution and fatigue, rather than conviction. The White House has made it clear that it has no intention of giving Republicans anything in exchange for increasing the limit.
However, Republican leaders continue to look for a policy concession from the Democrats in exchange for lifting the ceiling. This week, House Speaker John A. Boehner, in an attempt to avoid a partisan standoff with the White House, is floating a new debt ceiling solution to his Republican colleagues, calling for a restoration of recently cut military benefits in exchange for a one-year extension of the government’s borrowing authority. The restoration of those benefits would be balanced by cuts in another federal program. The benefits for retired military personnel were reduced in last year’s bipartisan budget agreement, which cut $6 billion in payments to veterans over the next 10 years. Republican momentum to support the idea is reportedly growing.
This approach is a departure from past debt-ceiling debates in which Republicans have frequently insisted on sweeping measure in exchange for an extension with House Republicans trying to gain concessions from the White House and Senate Democrats in the ongoing battle over spending and deficit control. But, some Republicans have said it is time to “end the drama,” “move on,” and pass a “clean” bill with no strings attached.
