The GOP debt limit jam

Business & Economy

The Big Story

GOP faces tough decision on debt limit

Some House Republicans are getting anxious about the lack of clarity over how leaders are approaching the default.

President Trump is pressuring Republicans to not allow Democrats to use the borrowing limit as a leverage point.

But fiscal hawks in the Republican conference could make any party-line debt limit bump impossible. And there is not a clear way to get Democratic support for a debt limit hike without significant concessions.

Republican leaders will have to make a play call soon. Government funding runs out March 14, and they are hoping to start teeing up the legislative vehicle for Trump’s agenda in February.

Former Treasury Secretary Janet Yellen said in a letter last week that the U.S. would have to start using “extraordinary measures” to meet its financial obligations, and outside analysts project that the “X-date” on which the U.S. could actually default in absence of congressional action will be sometime this summer.

House Majority Leader Steve Scalise (R-La.) after a meeting with Trump at the White House on Tuesday confirmed that the idea of pairing the debt limit with government funding is in the mix.

“We haven’t made a final decision on the debt ceiling,” Scalise said, adding, “Obviously, you’re looking at government funding as well, and there’s possibly an avenue where we would have the debt ceiling in the government funding bill.”

Such a plan, though, would mean GOP leaders — who can only afford to lose a couple of votes on any party-line measure — would have to rely on Democrats to pass the debt increase.

The Hill’s Emily Brooks has more here.

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Welcome to Tax Watch, a new feature in The Hill's Business & Economy newsletter focused on the fight over tax reform and the push to extend the 2017 Trump tax cuts this year.

Trump call for bipartisan tax deal falls flat

President Trump said Thursday he likely needs Democrats to help him pass a bill to extend his marquee tax cut law.

Some Democrats were shocked or amused by Trump's call. Others expected the president to realize eventually he couldn't pull it off with a partisan bill.

But not a single one who spoke with The Hill's Tobias Burns is willing to work with Trump given the current trajectory of the policy battles.

“My first instinct was to laugh and say, ‘Good luck with that,’” said Rep. Adam Smith (D-Wash.).

“To blatantly eliminate huge swaths of revenue in our current fiscal situation is something I certainly am not supportive of.”

Smith captured the views of most Democrats as they brace to defend major safety net programs from planned Republican cuts.

"We can’t have an administration that’s willing to cut, cut, cut the most vulnerable people in our society and then tell us to support them on tax cuts. Hell no,” said Rep. Maxine Waters (D-Calif.), the ranking Democrat on the House Financial Services Committee.

That's not to say there aren't areas of potential agreement between Democrats and Republicans on taxes.

Several Democrats have expressed interest in restoring credits for research and development, and a handful of Republicans support bolstering the child tax credit (CTC).

But as long as Republicans are aiming to cut taxes with a host of other non-starters for Democrats, the chance of bipartisanship is low.

“We were kind of hoping that we could get something done ourselves, but we’ll see. [Trump is] usually pretty accurate. It’s all math right now,” Rep. Mike Kelly (R-Pa.), a member of the tax writing Ways and Means Committee, told The Hill.

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