Originally published at Capital Gains and Games.
The U.S. Treasury said the existing federal debt ceiling was reached Monday. That means that the nation is about to enter the two-and-a-half-month period during which Treasury says it will have to resort to various techniques to manage the government’s finances without borrowing.
If you can avoid getting down in the weeds of the debate, the big-picture view of what’s ahead is not that difficult to analyze.
First, at this point it’s hard to see how the big budget deal that some on Capitol Hill are demanding as the price for their vote on a debt ceiling increase can happen by Aug. 2 — the date the Treasury says it will run out of cash management options. If anything, there is less of a consensus today than at any time over the past year about even the most basic elements of a budget deal, let alone the always-difficult specifics.
And even if a big budget deal is somehow negotiated, it’s not at all clear that there will be enough support to enact it by Aug. 2, or perhaps at all. The Republican House and Senate caucuses in particular have shown no signs that they will automatically follow their leadership on budget-related issues.
Second, it’s increasingly obvious that Speaker John Boehner (R-Ohio) will need a substantial number of Democratic votes to pass a debt ceiling increase in the House. He lost 59 GOP votes over the final continuing resolution for fiscal 2011, and the debt ceiling issue is even more ideologically important and potentially politically toxic. For that reason, those 59 Republicans should be considered the minimum number who will vote against a debt ceiling increase no matter what budget deal is attached to it. Assuming it’s a recorded vote and all Members participate in the debate, that means Boehner will be at least 35 votes short of the 218 he will need. Given the politics within the Republican Party, the number of Democratic votes he’ll need is probably closer to 60.
The situation in the Senate is likely to be the mirror image of the House, with Majority Leader Harry Reid (D-Nev.) very likely needing Republican votes to get a debt ceiling increase adopted. If a 60-vote supermajority is necessary, he may need as many as 15 GOP Senators to support the bill, about the same percentage of minority support that Boehner will need in the House.
Third, even if there were a general consensus about what to do on the budget, the need for both Republican and Democratic support in both chambers to enact a debt ceiling increase doesn’t just complicate the likelihood of getting a big deal this year, it may very well doom its prospects.
It also demonstrates that those who likely hold the real power in the debt ceiling debate are neither the tea partyers on the right nor their equivalent on the left. Neither group is likely to vote for raising the debt ceiling if there’s any kind of budget deal that makes the other happy. However, an agreement that appeals to the centers of each party could very well attract the needed votes.
Fourth, Boehner’s fire-and-brimstone rhetoric over the past few weeks about not raising the debt ceiling unless he gets what he wants — especially his speech to the Economic Club of New York on May 9 — has to be taken with more than just a few grains of salt. During the fight over the continuing resolution, the Speaker was able to increase his leverage and enhance his position by getting his caucus to pass a symbolically important bill just so that he could say that the House did what it needed to do. It’s not at all clear, however, that Boehner will be able to do the same with a debt ceiling increase, and that seriously changes the politics of what’s happening. Boehner’s biggest — and perhaps his only — threat at the moment is to keep a debt ceiling bill from being considered by the full House. But doing that more than likely would put the blame for any financial, fiscal or economic repercussions unambiguously on the GOP.
Let me state for the record that only revenue bills must originate in the House. A clean debt ceiling increase would not directly affect taxes, so the Senate could go first. However, the House has long insisted that it originate debt ceiling increases and appropriations, and it’s very likely that Senate leaders will remind everyone of that tradition if Boehner can’t or won’t move a bill.
All of this makes the 30,000-foot view of the debt ceiling debate much clearer than it might seem. A big budget deal is very unlikely this year, and without one it will be virtually impossible to enact a debt ceiling increase that is large enough to last for a number of years. Therefore, unless House Republicans carry out their threat to keep a debt ceiling increase off the floor, a series of short-term increases in the government’s borrowing limit are likely. Some type of largely symbolic change — like budget process revisions — will be needed to help middle-of-the-road Representatives and Senators justify their votes. The question will be whether there is enough support for raising the debt ceiling enough to get through the 2012 elections, or whether this fight will have to be replayed a number of times between now and then.