Is the White House taking advantage of the holiday recess to thumb its nose at Congressional Republicans over the nation’s debt limit?
That’s one interpretation of an announcement Treasury Department officials made today, which sets in motion an automatic increase in borrowing authority while Congress is out of session.
All of this dates back to the destructive summer fight over whether, by how much, and under what conditions to raise the national debt ceiling. Back then, the White House sought over $2 trillion in new borrowing authority — enough to assure the country avoided another debt limit fight in the middle of election season, when members of Congress might be even more willing to put the country’s creditworthiness at risk for short-term political gain.But Republicans, particularly in the House, said they’d require $1 in spending cuts for every $1 in new borrowing authority they agreed to allocate. That touched off the fight that left the government on the brink of a catastrophic debt default in August, and resulted in — among other things — Standard & Poor’s decision to downgrade the U.S.’s AAA credit rating for the first time in history, and the creation of the failed and now-defunct Super Committee.
But one of the lesser known terms of the debt ceiling agreement is that for the remainder of Obama’s term, the Treasury’s borrowing authority increases in “tranches.” For each additional increase in the debt ceiling, Congress can force a largely symbolic vote to “disapprove” of the administration’s decision — and create a neat little election year talking point for House and Senate Republicans. That vote is set up to fail as it already has once this year, and even if it passed it would be subject to President Obama’s veto.
The catch is that Congress has a small window within which to hold this vote. Treasury officials confirmed Tuesday that this week they will ask Congress for a $1.2 trillion increase in the debt ceiling. Under the terms of the law, Congress will have 15 calendar days to pass a resolution of disapproval if they want to try to block the increase. But Congress isn’t scheduled to return until January 17 — meaning the White House, perhaps unintentionally, timed this increase in the debt limit to squeeze Congressional Republicans. Either they end their recess early, or they’ll miss a rare opportunity to embarrass the President.
A Treasury official points out that at the end of the year the government has to service debt owed to itself — interest payments to the Social Security trust fund, for example — which spikes the country nearer to its legal limit. That’s why we’re so close to the debt ceiling again, just as Treasury expected we would be.
Which means the timing may be a coincidence. Spokespeople for congressional leaders of both parties didn’t respond immediately to inquiries — but if they think the administration’s playing games with the timing, you can be sure Republicans will make noise about it.