Wincing Dems are likely to raise the limit on debt

March 13th 2007 - Congressional Democrats are poised to take the politically uncomfortable but unavoidable step of raising again the federal debt ceiling, using the budget process to increase the nation’s credit limit even though they had hammered Republicans for making the same move in previous years.

Amid growing anticipation of the 2008 budget proposals from the chairmen who will navigate the path to conference, Sen. Kent Conrad (D-N.D.) and Rep. John Spratt (D-S.C.), the ticking clock of the federal debt limit has gone largely unnoticed. But the current ceiling of about $9 trillion is likely to be hit this fall, according to the Bush administration. Although any further raise has the potential to spark partisan and inter-chamber conflict, Congress must pass the hike to prevent the government from defaulting on its debt.

In a March 2 letter to the Senate Budget panel’s leaders, the Senate Finance Committee’s two senior members urged that Congress raise the debt ceiling through the budget reconciliation process.

“We recommend that the budget resolution include reconciliation instructions … to increase this statutory limit,” wrote Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa).

In the closely divided Senate, where Republicans have already slowed down several popular measures, the reconciliation process would block a filibuster of the debt-ceiling bill and shield it from contentious amendments. At the same time, going the reconciliation route would prevent House Democrats from using the “Gephardt Rule,” a tactic that allows the lower chamber to raise the ceiling without taking a roll-call vote that could turn into attack-ad fodder next year.

Whether it’s the House or the Senate that takes the brunt of the burden on whipping a vote to raise the debt limit, attacks from Republicans eager to exploit any cracks in the Democrats’ fiscal discipline are a near certainty.

“The debt limit vote always becomes a carnival for the opposition party,” said Brian Riedl, budget analyst at the conservative-leaning Heritage Foundation. “The opposition always uses the vote to bludgeon the majority, and this year will be no different.”

Anticipating that criticism, Democrats are employing a response similar to the message they used during the continuing resolution debate earlier this year. They preemptively blasted detractors of that spending measure by condemning GOP leaders for “leaving a mess” by failing to finish the appropriations cycle during the 109th Congress.

“It would be very difficult for anyone to say that reaching the public debt limit this close to a Democratic takeover of Congress had anything to do with Democratic policies,” one House Democratic aide said. “There will be some who will make that argument … but their politics drove us to this point. We’re working to make it better.”

Senate Budget Committee Chairman Conrad pointed a finger at the president, saying via e-mail: “It is his borrow-and-spend policies that have resulted in the massive buildup of debt.

“Fortunately, Democrats are working to take this country in a better direction, one that restores fiscal responsibility,” Conrad added. “But it will take time to change Republican policies that have exploded deficits and debt.”

House Speaker Nancy Pelosi (D-Calif.) and other Democratic leaders blasted Republicans at the dawn of the 108th Congress when they reinstated the Gephardt rule after trumpeting its removal during the previous session. In another sign of things to come, House Minority Leader John Boehner (R-Ohio) signaled during his 2006 leadership campaign that he would push for a roll-call vote on all future debt-limit hikes.

One Republican aide forecast that the House would invoke Gephardt and use its budget resolution to increase the debt ceiling, the fifth hike needed since President Bush took office.

“Having reconciliation instructions gives us the option to pursue that if we choose,” the GOP aide said. “[But] historically, we’ve not done it. We take up the path of least resistance. … If I were making predictions, we’ll wait until the very last day that Treasury says [the current limit will last], and the Senate will pass the House-passed bill.”

Robert Bixby, chairman of the Concord Coalition, a nonpartisan budget-analysis group, said he would urge a recorded vote in both houses.

“It gives Congress an opportunity to assess the consequences of past actions,” Bixby said. “Having it go up automatically, while it’s politically convenient, avoids accountability for fiscal policy decisions. If Democrats really wanted to stick to their prior rhetoric, they should have an explicit vote.”

Meanwhile, House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) appeared to reference the Gephardt route in his own letter to the Budget panel.

“The committee notes that it has been the practice of the House to pass a resolution raising the debt ceiling to the level necessary to accommodate the assumptions of the resolution for its first fiscal year,” Rangel wrote.

Both Spratt and Senate Majority Leader Harry Reid (D-Nev.) declined through their offices to comment on which option Democrats currently favor to raise the limit.

The vote may be especially tough for Democratic presidential hopefuls such as Sens. Hillary Rodham Clinton (N.Y.) and Barack Obama (Ill.). The latter gave a floor speech last spring vilifying the higher credit limit.

“Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren,” Obama said. “America has a debt problem and a failure of leadership.”

Democrats’ ability to invoke Gephardt, however, hinges on their success at passing a budget conference report, which Republicans failed to do last year.