Senate Scheming How To Pass A Stealthy Debt Ceiling Boost
As the inevitable breach of the $12.1 trillion federal debt ceiling looms, with the official debt figure now at $11.95 trillion, Senate Democrats have started to ploy how to best pass the resolution without attracting much if any public attention. Yet, with this issue now actively on everyone's radar screen, it will be interesting to see just how this can be accomplished. Politico reports that Democrats are now planning on considering the debt increase provision to a "must-pass" bill such as the DoD spening bill. As Politico reports: "Adding it to the defense bill would allow Democrats to argue that they voted for the measure to help troops in harm’s way — and downplay that their vote also expanded the limit for how much money the country can borrow."
Unlike those of the House, the Senate’s rules do not allow it to automatically increase the debt with its adoption of the annual budget resolution. That puts senators in a tough position politically. And if the Senate balks at the increase, Treasury Secretary Timothy Geithner has warned that the slow economic recovery could collapse, as investors around the world would sharply lose confidence in America’s abilities to meet its credit obligations.
While Republicans expect all 40 members to vote against a debt limit increase, the unity even within the Democrats is questionable.
“Regardless of the political treachery, I’m more worried about the economic treachery and the monetary aspects of it with devaluing the dollar,” said Sen. Ben Nelson (D-Neb.).
Senate Budget Committee Chairman Kent Conrad (D-N.D.) and the committee’s ranking member, Sen. Judd Gregg (R-N.H.), whose panel is in charge of the debt limit increase, both told POLITICO that appropriators may add the language to must-pass spending legislation.
And Conrad said he wants any debt increase to be coupled with language that would create a “comprehensive” process to force Congress to begin making tough choices to cut the debt — something akin to legislation he and Gregg proposed that would establish a commission to study ways to cut the deficit, whose recommendations would be fast-tracked through Congress.
Sen. Evan Bayh of Indiana, a centrist Democrat, said he wouldn’t support an increase in the debt limit “unless there’s some mechanism to start getting the deficit under control.”
With the daily dollar pounding now becoming a mainstream issue, it is only a matter of time before the debt ceiling topic also trickles down for general public regurgitation. At the end of the day, the question boils down to how massive debt increases now can be spun as necessary to contain debt increases, and in fact to reduce debt, in the future. If history is any precedent it will be difficult to convince a public, increasingly skeptical of the Administration's economic policies, that this move will be in the best interest of Americans. Additionally, if the Senate continues to underestimate America's sensitivity to this issue, and indeed tries to sneak the debt provision through, it will only turn even more people against Obama's debt exploding strategy. In the meantime, the Treasury is running out of ways to optically keep the debt under the ceiling: the clock is ticking on the Senate, and the longer it delays to have a unified approach to resolving this critical issue, the higher the likelihood of a major backlash when it finally does happen.