As Treasury hits debt limit, default on hold - for now

By: CBS
By: CBS

Washington, DC (CBS) - The U.S. officially exhausts its borrowing authority Friday, and the Treasury Department will be forced to resort to so-called “extraordinary measures” to prevent a default on the debt – a tactic that will work until late February, Treasury Secretary Jack Lew has said repeatedly.

But the deadline has been greeted with nonchalance on Capitol Hill, where Republicans have been plotting to demand something in return for raising the debt ceiling – they're just not sure what. And even though they couldn’t agree on something, lawmakers shrugged, packed their bags, and left town for the weekend.
“I think that we’re still looking for the pieces to this puzzle,” House Speaker John Boehner, R-Ohio, told reporters Thursday morning. “But listen,” he assured them, “we don’t want to default on our debt and we’re not going to default on the debt.”

The folks up the way on Pennsylvania Ave. were similarly unalarmed by the impending deadline, and seemed content to stand back and let House Republicans sort out their strategy.

“We certainly believe Republican leaders who say that we have to raise the debt ceiling. It's the responsibility of Congress to ensure that bills that have already been incurred are paid in a timely fashion so that the United States doesn't default,” said White House Press Secretary Jay Carney.

Carney maintains the administration’s position has not changed – they will not negotiate. “We are not going to pay ransom in return for Congress fulfilling this basic responsibility,” he said.

Boehner and President Obama have tried and failed to negotiate on fiscal issues time and time again – over the debt ceiling once before, tax and entitlement reform, the grand bargain, and the government shutdown. This time, they aren’t even trying to get together to talk (though this would violate the administration’s no-negotiations policy).

That leaves Boehner to sell his conference on deal the president hasn’t had a hand in crafting. But so far, Boehner isn’t having much success among his fellow Republicans.

Earlier this week, House Republican leaders pitched two possible trades for a year-long debt ceiling extension: approve the controversial Keystone XL pipeline or repeal the “risk corridors” in the Affordable Care Act, a provision that which enables the government to share in the risks and gains of the marketplace. If the cost of insuring people is lower than expected, insurers pay into a pool, and if it’s higher than expected, they can draw from that pool.

But just a day later, neither had enough support, and both ideas were ditched.

Now, they’re kicking around a few possibilities that could even get some Democratic support: patch the reimbursement formula for doctors who treat Medicare patients, known as the “doc fix;” change the congressional budgeting processes and undo cuts to the cost-of-living formula for military retirees that were part of the budget deal negotiated last year.

It’s unclear that any of those options will pass, and the Republicans might end up having to approve an unconditional debt ceiling increase, which some members say is inevitable.

“We‘ve had three years of fighting over the debt ceiling, [and] unfortunately we have not been victorious in many of those fights. I think that this year the speaker should just allow the Democrats to pass a clean debt ceiling, the Democrats can own it, they can explain to the American people why they want to continue to increase the debt without any major reforms and we can go to the American people and we can tell them that if they get rid of [Senate Majority Leader] Harry Reid we will actually make the reforms that are necessary for America to be strong again,” said Rep. Raul Labrador, R-Idaho, at a regular forum featuring conservative lawmakers Wednesday morning.

That leaves Boehner in his usual position: at the head of a fractious group of lawmakers, trying to piece together enough votes to keep the government running.

At least he has a sense of humor about it.

“Mother Teresa is a saint now, but if the Congress wanted to make her a saint and attached that to the debt ceiling we probably couldn't get 218 Republican votes,” he said Thursday.

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