House GOP readies debt limit package
House speaker John Boehner and the GOP leadership is getting ready to introduce legislation that would raise the debt ceiling through the first quarter next year. In return, they want a restoration of cuts to military pensions and the addition of a Medicare "Doc Fix" that would increase reimbursement rates for phyhsicians.
Patching the reimbursement rate for doctors who treat Medicare patients - known as the Sustainable Growth Rate or "doc fix" - and changing cost of living benefits for the military could be costly. Under the emerging plan, House Republicans would seek to pay for those items with an extra year of cuts to mandatory spending and changes to pension contributions.
The House needs to act fast. Treasury Secretary Jack Lew on Friday sent a letter to congressional leadership that said that the "extraordinary measures" that the federal government uses to fund operations after the nation has reached the debt ceiling will not "last beyond Thursday, February 27."
"At that point, Treasury would be left with only the cash on hand and any incoming revenue to meet our country's commitments," Lew wrote in the letter to congressional leaders, which was obtained by POLITICO.
Hiking the debt ceiling until February or March of 2015 could have tremendous political benefit for both parties. It would place the next borrowing limit deadline after the 2014 midterm elections.
This plan, which sources describe as the leadership's top option for lifting the borrowing limit, would suspend the debt limit until February or March of 2015. If this cannot pass, Speaker John Boehner (R-Ohio) would likely be left to pass a debt limit increase without policy strings attached.
House Republicans have had a tough time coalescing around a debt limit plan.
Top GOP lawmakers proposed several legislative add-ons, including language that would mandate the construction of the Keystone XL pipeline and tweaking the military COLA formula. But rank-and-file Republicans balked: there's a healthy pocket of them who would never vote to raise the debt limit, and others who thought the proposed legislative add-ons were too paltry.
Any bill would need to be presented to rank-and-file lawmakers before a vote - but time is short. The House is only in session for three days next week - it returns Monday evening and recesses Wednesday. The chamber then recesses for a week, and returns Feb. 25 - two days before Treasury says the debt ceiling must get lifted.
Recall that it was just last month that Republicans agreed to the cuts in military COLA's. It was a bad idea at the time and fixing their mistake will cost a lot of money. The "Doc-Fix" is a joke. Every year, Congress cuts the Medicare reimbursement rate paid to doctors and every year, they rescind it.
It's all moot anyway. A third of the Republican caucus in the House won't vote for any increase in the debt limit. And Democrats swear they will only vote for a "clean" debt limit bill. That will leave Boehner no option except to bring a clean bill to the floor and pass it with the help of the Democrats.
Note that this is an open ended increase in the debt limit. There is no set amount that the debt limit will be raised.
It's like giving a crank addict their own cooking lab.