Offer on debt ceiling increase kick–starts negotiations


October 11, 2013

Yesterday the House Republican leadership made an overture to Senate Democrats and President Obama in the form of a six-week debt ceiling increase. This short-term deal would require another debt limit increase by November 22, 2013, and would include language to prohibit the Treasury Secretary from using so-called “extraordinary measures” to move funds in order to buy additional time past that deadline.

Under the proposal, the six-week extension would be free of any Affordable Care Act (“ACA”) language or other extraneous provisions, but it would not address reopening the federal government. In exchange for the temporary debt-limit increase, House Republicans want a commitment from the White House to negotiate a longer-term budget plan that would reopen the government.

The White House indicated President Obama would be open to this type of short-term deal on the debt ceiling, but he would not enter into budget negotiations until the federal government was reopened. Senate Republicans have also expressed concern with the idea of temporarily raising the debt ceiling without addressing a temporary funding measure to fully open the federal government.

One scenario would have the House Speaker John Boehner (R-OH) bring a “clean” six-week increase in the debt limit to the House floor for a vote, and the Senate would add a short-term federal government spending bill with perhaps a couple of other provisions considered tolerable to the White House as a fig leaf to House Republicans. These might include providing greater flexibility for agencies implementing the sequester, repealing the medical device tax, and requiring income verification for ACA subsidies.