Tea Party Scorns Republicans as House Suspends U.S. Debt Limit
Michael C. Bender and Laura Litvan, ©2014 Bloomberg News
Published 9:42 pm, Tuesday, February 11, 2014
Feb. 12 (Bloomberg) -- House Republican leaders sought to shield themselves from blame for another round of U.S. fiscal uncertainty by advancing a debt-limit increase without strings.
Small-government groups are blaming them anyway for yesterday’s vote. They’re accusing them of abandoning Republican principles and are vowing to extract a political price in this year’s congressional elections.
House Speaker John Boehner and many in his leadership team were among the 28 Republicans who joined with Democrats to pass a suspension of the debt ceiling until March 15, 2015. The vote was 221-201.
“The House leadership has given up any pretense of fighting for fiscal responsibility,” Matt Kibbe, president of Washington-based FreedomWorks, a Tea Party-backed group, said in an interview yesterday. “We need to add more members of Congress in 2014 that want to come here and tackle the budget and tackle the national debt.”
Groups aligned with the small-government Tea Party movement pledged to recruit challengers for lawmakers seeking re-election and provide financial support to their campaigns.
For Boehner, the vote was a replay of the difficult political choice he’s faced for the past three years -- how to appease Tea Party-backed members without risking a government shutdown or a U.S. default. Republicans were blamed in public approval polls for the October fiscal impasse, and Boehner didn’t want a repeat, even if it meant frustrating a wing of his party.
Weakened Position
Republicans’ divisions on spending helped provoke the 16- day partial shutdown in October. The divide also has weakened Boehner’s negotiating position with President Barack Obama and Senate Majority Leader Harry Reid, who stuck to their refusal to consider conditions for raising the debt limit.
The Senate may vote as soon as today on the House-passed measure, sending it to Obama for his signature.
Senator Ted Cruz, a Texas Republican aligned with the Tea Party, said he’ll push to require a 60-vote threshold in the chamber for a debt ceiling increase.
“Republicans in the Senate and House should stand united” he told reporters. “Stop digging the debt-hole deeper and deeper.”
A suspension of the U.S. debt limit enacted by Congress in October expired Feb. 7. Treasury Secretary Jacob J. Lew said last week that borrowing authority may not last past Feb. 27.
Republican Votes
Two Democrats, Jim Matheson of Utah and John Barrow of Georgia, joined most House Republicans in voting against the measure yesterday.
Besides Boehner, among Republicans voting for the bill were House Majority Leader Eric Cantor of Virginia, Ways and Means Committee Chairman Dave Camp of Michigan and Appropriations Committee Chairman Hal Rogers of Kentucky.
Business groups urged Congress to raise the debt ceiling as soon as possible to assure companies that the U.S. government won’t default on its obligations.
The U.S. Chamber of Commerce, the country’s largest business lobbying group, said in a letter to lawmakers Feb. 10 that quick passage would avoid “collateral stresses so often inflicted during similar episodes in recent years.”
The House vote, coupled with a two-year budget agreement in December, “will effectively put fiscal policy on auto pilot” until well past the November election, said Charles Gabriel, a policy analyst at Capital Alpha Partners in Washington.
‘Positive Development’
Anne Van Praagh, Moody’s Investors Service managing director and chief credit officer, said the House vote was a “positive development.”
“A further lack of consensus would have potential negative consequences for the market and the economy,” Van Praagh said in an interview. “The fact that we’ve averted that is a good thing.”
Muted increases in Treasury bill rates this month signaled that investors saw little risk that U.S. lawmakers wouldn’t raise the nation’s borrowing limit on time.
One-month bill rates slid to 0.05 percent from a high of 0.14 percent at the beginning of the month. The rates surged as high as 0.45 percent in October before lawmakers agreed to suspend the debt limit until Feb. 7.
A ‘Joke’
Groups aligned with the Tea Party movement went on the attack.
Andy Roth, the top lobbyist for the Washington-based Club for Growth, an anti-tax group, said in an e-mail to congressional offices that he thought it was a “joke” when he heard Boehner was allowing a measure on the House floor that raised the debt ceiling without conditions.
Barney Keller, a spokesman, said in an interview that the vote will be one of those considered when Club for Growth decides which lawmakers it will support and oppose. The group operates a super-political action committee that will spend millions of dollars in this year’s congressional election.
Senator John McCain of Arizona, the 2008 Republican presidential nominee, said Boehner’s decision to move a debt ceiling increase without strings attached shows Republicans lost standing with the public since the government shutdown.
“The American people overwhelmingly rejected the shutdown of the government,” McCain said, pointing to polls that showed Republicans took the bulk of the blame. “Americans don’t like government, but they don’t want it shut down. It was an object lesson for Republicans.”
House Minority Whip Steny Hoyer, a Maryland Democrat, said the issue comes down to whether the U.S. will make good on its obligations to debt-holders and provide stability by boosting the limit.
Paying Bills
“Will America pay its bills?” Hoyer said on the House floor before the vote. “Will it give confidence to the business community? Will it give confidence to its own citizens? Will it indeed give confidence to the world?”
The U.S. Congressional Budget Office reported last week that the budget deficit this year will be the smallest as a share of the economy since 2007 as stronger economic growth boosts tax revenue.
The CBO said the deficit will narrow to $514 billion this fiscal year, or 3 percent of gross domestic product, from $680 billion in 2013 before surging to $1.07 trillion in a decade.
Polls show that the issue of deficit reduction is declining as a priority for U.S. adults. A Jan. 15-19 poll by the Pew Research Center found that for the first time since Obama took office, the deficit slipped as a top item, with 63 percent of those polled saying that closing the budget gap should be a top priority for Congress and the White House. That’s down from 72 percent a year ago.
The poll of 1,504 adults had a margin of error of plus or minus 2.9 percentage points.
--With assistance from Kathleen Hunter, Roxana Tiron, James Rowley and Julie Bykowicz in Washington. Editors: Jodi Schneider, Laurie Asseo
To contact the reporters on this story: Michael C. Bender in Washington at mbender10@bloomberg.net; Laura Litvan in Washington at llitvan@bloomberg.net
To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net
