Jun 18, 2017

Trump's hands-off approach to looming debt ceiling fight

Jim Lo Scalzo / AP

President Trump is likely to play a much smaller role than previous presidents have played in the looming debt ceiling crisis.

Marc Short, the director of the White House's Office of Legislative Affairs, has told associates his recommendation to the President is that the House and Senate should initiate the debt limit negotiations within their own conferences rather than leaning on Trump to do the heavy lifting. (During the previous debt ceiling crises, Obama took the opposite strategy — aggressively lobbying Congress both publicly and privately.)

  • Short's reasoning, according to sources familiar with his private conversations, is that congressional spending habits got America into this mess and the President has enough on his plate with healthcare, tax reform — not to mention the escalating Russia investigation — and would gain nothing from spending his political capital on the debt ceiling fight.
  • Trump will ultimately have to play some role in the debt ceiling debate, but the White House won't have him out there providing cover for congressional leadership to negotiate an unpopular (read: Democratic/moderate-led ) bill.
  • The current White House thinking is that Congress should first present solid options to them while the administration focuses on health care, tax reform, and infrastructure.

Why this matters: Presidents have traditionally used the weight of the presidency — in various ways public and private — to push Congress to raise the ceiling. Some in Republican leadership circles are frustrated that the White House has no unified position on the debt ceiling strategy and appears willing to make GOP leadership do the thankless work.

"This is the full faith and credit of the United States of America. It needs presidential leadership," said a source briefed on Short's recommendation. "It is not in a single member's best interest to vote for [a debt ceiling raise] and it has always taken the weight of the presidency behind it."

Current status of the debt ceiling debate:

Nobody agrees on anything. Congressional leadership has done little serious work so far and is nowhere near settled on a strategy.

  • The Trump Administration wants Congress to raise the nation's borrowing limit before the August recess.
  • But the administration hasn't agreed on how it should be done. Budget Director Mick Mulvaney wants to use the debt limit bill to cut spending. Treasury Secretary Steven Mnuchin just wants the debt ceiling raised without fuss — to avoid a last-minute standoff in September that could crash markets.

Three broad options being informally discussed:

  1. The conservative route: the House Freedom Caucus and conservatives in the administration, like Mulvaney, want to attach the debt ceiling raise to reforms that would seriously address the nation's debt crisis. An example would be attaching the debt limit to a balanced-budget amendment. A source close to leadership described this option as a "fantasy" with no hope of passing the Senate.
  2. The "clean" option: The conventional wisdom until recently has been that Democrats would support a clean debt ceiling bill, but sources in the White House and in leadership circles have told me they're no longer confident. "Now they're saying we have all the leverage, we should be asking for [progressive] stuff," one source said.
  3. The moderate Republican/Democrat option: attaching the debt limit raise to "must-pass" priorities for moderates like reauthorizing CHIP [the Children's Health Insurance Program] or lifting discretionary spending caps. A source close to leadership summarized this option as: "let's look at all the hard stuff that we have to do before the end of the year, and put it all together into one governing package."

Between the lines: Some in the White House believe Republican leadership has already given up on the Freedom Caucus / Mulvaney approach to the debt limit and already concluded the only workable path is to collaborate with Democrats and moderate Republicans. They believe leadership wants cover from the President for this unpopular strategy, which would enrage true-believer grassroots conservatives and figures at right-wing media outlets like Breitbart. Sources familiar with leadership's thinking, however, tell me they're not close to having made such decisions. (That said, a good number have admitted to me privately that they think working with the Freedom Caucus on the debt ceiling is a lost cause.)

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