WASHINGTON -- There is increasing concern among Democratic officials both on and off the Hill that Republicans will draw out negotiations over raising the nation’s debt ceiling in an effort to institute one of several blunter deficit-reduction measures.
In recent days, chatter among operatives and Hill aides has centered on one specific addition the GOP is pushing in exchange for signing off on a debt limit increase. A cap on overall government spending -- bringing it to 20.6 percent of GDP over the course of ten years -- has been sharply criticized as too crude and potentially damaging for a fragile economy. But the proposal, known as the CAP Act, has bipartisan support in both chambers of Congress. And as Republican leadership surveys the landscape to see what type of concessions it can extract during the debt-ceiling debate, members have homed in on caps, viewing them as an easy sell to both on-the-fence lawmakers and the public.
House Speaker John Boehner’s office declined to comment on ongoing negotiations over the debt ceiling, which currently stands at $14.3 trillion and will need to be raised sometime in late May or June. House Minority Leader Eric Cantor (R-Va.) said, in a statement on Thursday, that "Republicans will not agree to raise the debt limit without binding budget reforms and immediate spending cuts." With respect to what amendment leadership would welcome, a top leadership aide would only say that, “no decisions have been made.”
For Democrats, the fact that talks are still ongoing -- and concrete details have yet to be hammered out -- is troubling in its own right. The closer that the government comes to breaching its debt limit, the more likely the party is to make a deal on spending caps.
“The fear is that the House will sit on the debt limit till mid-June, and then do nothing, and then pass a bill with global caps, send it to the Senate and dare them to vote against it,” said one party operative who has been involved in debt limit discussions. “And the concern is moderate Democrats will then feel like they have to vote for it.”
A last minute scenario along these lines would put a tremendous amount of pressure on some of the more fiscally conservative members of the Democratic Party. Senator Claire McCaskill (D-Mo.) is a co-sponsor of the spending caps bill in the Senate. Rep. Jim Cooper (D-Tenn.) is the chief Democratic shepherd of the idea in the House.
McCaskill's office did not say, one way or the other, whether she believed the CAP Act could or should be attached to a deficit ceiling vote, just that Republicans shouldn’t delay the process as a negotiating tactic. “[The Senator] thinks it is profoundly irresponsible to play chicken with the debt limit vote, especially to pursue divisive social issues," said McCaskill spokesperson Laura Myron.
An aide to Cooper, meanwhile, pointed out that that despite his support for the CAP Act, the congressman has warned against brinksmanship in the debt-ceiling debate. Sen. Joseph Lieberman (I-Conn.), another proponent of spending caps, would not support raising the debt limit unless the CAP Act or something similar were attached, his office confirmed.
To that point, Senate Democratic leadership has grown personally engaged in the debate telling members to hold the line against strict caps. One aide relayed that even some unlikely suspects, such as Senate Budget Committee Chairman Kent Conrard (D-N.D.), have adamantly argued that the party should insist on tax policy being part of the discussion.
“There is strong feelings, at least with the overall grand bargain on debt reduction, that revenues need to be in the picture,” said a Senate Democratic leadership aide.
A failure to address revenue needs is, critics argue, just one of the substantive problems with the CAP Act. The legislation also requires that federal spending be brought to a level (as percentage of GDP) below where it was during the Reagan administration. At a time when people are living longer than ever, this would likely lead to draconian cuts in Social Security or Medicare. The CAP Act's timeframe is also considered problematic. Spending currently represents roughly 24 percent of GDP. To bring that down to 20.6 percent in the next ten years could end up thrusting the country back into a recession.
“No one should be fooled by so-called global spending caps,” Michelle Nawar, Director for Legislation at the Service Employees International Union told The Huffington Post last week. “They are nothing more than a backdoor to the Republican budget and cutting services for seniors and children.”
Rather than scrap the idea altogether, however, lawmakers on the Hill have discussed tinkering with it, both to make it more palatable to objecting Democrats and, subsequently, ease its inclusion in a debt-ceiling compromise. Among the changes being discussed are raising the end target for spending as percentage of GDP (to something higher than 20.6) and elongating the timeframe, or “glide path” for reaching that goal (to, perhaps, 15 or 20 years).
“Undoubtedly there will be changes made, but the main point has been that Congress doesn’t do anything unless they have their feet to the fire. They have to have hard deadlines and this sets some hard deadlines,” said one Hill aide whose boss is supportive of spending caps.
Such talks remain in nascent stages. But the longer they go on, the more likely it is that Democrats will be put in an untenable position: more willing to embrace spending caps than see the debt ceiling reached, and, once again, enduring the resentment of their base.
“This wouldn’t be a compromise, but a complete capitulation by Democrats and our values,” said Nawar.