Boehner Proposes 6-Week Increase In Debt Limit
Boehner Proposes 6-Week Increase In Debt Limit
House Speaker John Boehner is proposing a six-week debt ceiling increase to his Republican caucus. If adopted, it would take away the immediate threat to financial markets.
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It's MORNING EDITION from NPR News. I'm Steve Inskeep.
DAVID GREENE, HOST:
And I'm David Greene. Good morning. Seven days from now - according to the U.S. Treasury Department - the U.S. approaches the point where it can no longer pay its bills. The federal budget deficit has been dropping dramatically. But in the wake of the Great Recession, it is still very high.
Now, the deficit, let's remember, is payments that exceed this year's tax income - everything from salaries for American troops to the salaries for members of Congress, to interest on the national debt. Congress voted to make those payments; President Obama signed off. But to finance them, Congress has to vote again to let the government sell bonds - raising or suspending the so-called debt ceiling.
And we have some news this morning in Washington. House Speaker John Boehner, in a private meeting with Republican colleagues, proposed a short-term debt ceiling increase. It's an idea that the White House has said they are open to. Joining us now to talk about this, NPR White House correspondent Scott Horsley and congressional correspondent Tamara Keith. Good morning to you both.
TAMARA KEITH, BYLINE: Hi.
SCOTT HORSLEY, BYLINE: Good to be with.
GREENE: Well, Tam, what do we know so far about Speaker Boehner and what he told his caucus?
KEITH: We know what the plan was going into this meeting and often, the plans change once they come out of these meetings.
KEITH: But the plan, going in, was a six-week extension of the debt ceiling. So raising the debt ceiling, taking the threat of default off the table for six weeks. Clean is what the speaker was proposing - no policy riders or Obamacare defunding attached.
GREENE: Some of the things that the Republicans wanted to deal with during these negotiations.
KEITH: Exactly, with the hope that if - if the president is true to his word, they could then begin having discussions with the president - unrelated to the debt ceiling - about the nation's fiscal issues.
GREENE: OK, so assuming that this plan - as we understand it, so far - goes forward, that pushes the debt ceiling threat to late November; the government is able to pay its bills for a bit of time. Does this do anything for the partial government shutdown that we've been hearing so much about?
KEITH: The discussion - at least, going into this meeting - was that no, this would not deal with ongoing funding of the government; that that would remain a separate fight. And many conservatives want it that way because they feel like the continuing resolution and the government shutdown is where they have their leverage, and where they're having their fight about the health care law. The White House released a statement essentially saying, we'll be happy to negotiate once the threat of default, and the harmful government shutdown, is off the table.
GREENE: Well, Tamara Keith, House Speaker John Boehner - it seemed like he has been wanting to make the debt ceiling battle a big negotiating chip for him on many of these issues, including Obamacare. If he's proposing this short-term increase in the debt ceiling, what happened? Has he decided he doesn't need that negotiating chip anymore?
KEITH: One thing that happened is that the government shut down, and that became the big leverage point. The other thing is that the president has signaled very loudly and clearly that he would be open to something short term and that then, discussions could begin. And Speaker Boehner is looking for a way out, and he believes the only way out is something big. If there's a big problem, there needs to be a big deal to get out of it. And that seems to be what he's angling for.
GREENE: Let me turn to you, Scott Horsley, for the administration side of things. One of the reasons that there was some pressure on John Boehner and the Republicans is the argument that not raising the debt ceiling would put a whole lot of pressure on the economy. And we heard some of that this morning.
HORSLEY: That's right. Treasury Secretary Jack Lew was up on Capitol Hill, testifying before the Senate Finance Committee. And his message was basically, don't wait. A week from today, the Treasury exhausts its borrowing authority, and they'll have to pay all their bills with just the cash they have on hand. We don't know exactly when the crunch point would come. But Lew told the senators, this is too important to take any chances.
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GREENE: Now, Scott, just in the few seconds we have left - I mean, some Republicans have said this whole battle over the debt ceiling is a lot of hype; that the government can pay its bills. It's just a matter of prioritizing.
HORSLEY: That's right. And Lew took them to task for that. He said, look, I don't have the legal authority to pick and choose which bills to pay. And even if I did, the automated systems at the Treasury that make the payments aren't set up to do that. The only thing they're set up to do is pay all the bills when they come due.
And I must say, the market seemed to be reacting very well to this news that we may have a breakthrough on the debt ceiling; that the Dow is up, back around 15,000.
GREENE: All right. NPR White House correspondent Scott Horsley, NPR congressional correspondent Tamara Keith, thank you both.
KEITH: Thank you.
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