House Conservatives on Debt Ceiling
Last week, the monthly Conversations with Conservatives took place on Capitol Hill. Moderated by Heritage Foundation’s Robert Bluey, over half-a-dozen fiscally conservative Representatives participated, discussing issues like the NSA, the farm bill, and immigration.
Bluey was kind enough to give me an opportunity to pose two questions about the debt ceiling. The questions, as well as all answers from the gathered Members, can be seen in the video below, starting at 4:08. The answers and subsequent discussion were enlightening into how much is still unknown about the House’s strategy on the debt ceiling.
The questions themselves were simple: By saying he wants real cuts in exchange for a debt ceiling hike, did Speaker Boehner mean he wants spending reductions relative to an assumption of future growth, or relative to this year’s budget? Second, will House conservatives put forth a plan to avoid the “slapstick comedy” of 2011, when the GOP was scrambling for a negotiating strategy days before the Budget Control Act was passed?
First up was Republican Study Committee Chairman Steve Scalise (R-LA). He said the House has passed a 10-year balanced budget, and “mandatory spending reforms” are the most critical part of “any budget deal” because without those reforms we will keep hitting the debt ceiling.
Rep. Tim Huelskamp (R-KS) was next, and said the GOP Conference hadn’t really discussed the debt ceiling since January because the increase under discussion now was kicked back due to tax increases and other factors earlier this year. Huelskamp, a consistent supporter of fiscal responsibility, emphasized the importance of entitlement reform, which he noted “take more than a few years…to have an effect.”
Rep. Justin Amash (R-MI) spoke up immediately after Rep. Huelskamp, noting how the debt ceiling went up by $300 billion in May with little notice and no cuts.
According to Rep. David Schweikart (R-AZ), he hopes “what the Speaker meant was actual cuts and not something spread over 10 years…” Beyond that, however, the Congressman argued that the debate over spending cuts will be different in 2014 than many anticipate. He pointed out that the House has passed a debt ceiling “prioritization” bill that removes the cost of interest payments from being impacted by hitting the debt ceiling. With the 2014 fiscal year deficit anticipated to be $480 billion, and the interest projected to be $230 billion this leaves $250 billion left for a debt ceiling discussion.
Congressman Schweikart closed his comments by noting the nation’s borrowing could thus increase by $250 billion…or Congress could step up and find a way to patch together fixes, perhaps including sales of federal assets or “liquidating assets” held by Freddie Mac and Fannie Mae, among other options.
Rep. Steve Pearce (R-NM) spoke up last, noting that there exists a trillion dollars in cuts on his website “that would not hurt end users, but would get out the choking bureaucracy that we face.”
From these comments, a few conclusions:
1) As Rep. Amash pointed out, the claim of “real cuts” in exchange for a debt ceiling hike is almost certainly not an accurate one.
2) Even a leading conservative like Rep. Schweikart does not know if Speaker Boehner will actually aim for a set of significant one-year cuts. This does not bode well for the House’s negotiating strategy, both politically and substantively.
3) The Speaker, the President, and anyone else can find hundreds of billions of dollars in annual cuts that will do a great deal to help the country’s fiscal situation, should that be their goal. Clearly, it is not.
4) Rep. Huelskamp is wrong that it takes a few years for entitlement reform to really have an effect. It is true that politically, it takes some time. However, reforms could be implemented in 2014 that would start modestly and quickly grow into major budget reductions. It all depends on whether Congress’ leadership has the intestinal fortitude to make real, large changes in the near future.
Note: In an e-mail to Tea Party Patriots, Congressman Schweikart clarified that “the US is spending over $230 billion on interest payments on our publicly held debt,” and that he was not talking about all interest payments made annually on America’s debt, which the Treasury Department reports as being significantly higher.
All in all, it looks like House leadership needs some pushing by Tea Party activists to take a much stronger stand on the debt ceiling. Make sure they hear you as Congress heads into its August recess.