Scoop: Freedom Caucus plan for the debt ceiling
One conservative group that will announce a set of demands for the debt ceiling is the House Freedom Caucus. Sources tell me Mark Meadows and his group of some 40 members will call on Republican leadership to pass a bill in July to deal with the debt ceiling and avoid a last-minute stand-off in October.
Our thought bubble: Democrats are very unlikely to support the Freedom Caucus' first plan, meaning there's no path to 60 votes in the Senate. Also, a number of Treasury officials, past and present, believe asset sales are not a viable way to avoid or delay raising the debt limit. As for the other more aggressive options, a source familiar with House leadership's thinking told me such approaches are unrealistic and "typical of the Freedom Caucus."
The Freedom Caucus will offer three options:
- The Lite (non-spending cut) option: a bill to change how the government pays its obligations so that there'd be no default, and more of the government can remain open in future fights over spending. The proposal would raise the debt ceiling by about $1.5 trillion. It would also restrict how much money the government can spend in the lead-up to the debt ceiling, and would direct the government to sell financial assets to pay down the debt. It would also, controversially, let the administration take back money agencies haven't spent, and use that money to pay down debt.
- The Budget option: If leadership rejects option 1, the Freedom Caucus will likely demand that they attach the debt ceiling hike to a 2018 Budget bill, in exchange for at least $250 billion in cuts to mandatory spending. "Which would certainly making budget negotiations much more difficult," a Freedom Caucus source adds.
- The health care option: try to attach the debt ceiling rise to a repeal-only health care bill. (This approach relies on the extremely unlikely scenario that Senate leader Mitch McConnell separates repeal and replace into two bills.)