GOP leaders in debt limit quandary between Trump, fiscal hawks

Congressional GOP leaders are in a massive pickle as they weigh how to deal with a looming deadline to raise the debt ceiling.

President Trump is pressuring Republicans to not allow Democrats to use the borrowing limit as a leverage point. But fiscal hawks in the Republican conference could make any party-line debt limit bump impossible. And there is not a clear way to get Democratic support for a debt limit hike without significant concessions.

The latest idea being tossed around by Republicans is to include a debt limit increase in a package that pairs regular government funding and wildfire aid, in the hope that the wildfire aid would entice enough Democrats to make up for opposition from GOP fiscal hawks. That comes after an initial plan to include a debt ceiling hike in the party-line budget reconciliation bill that will encompass Trump’s ambitious legislative agenda, which would severely complicate the already-complex undertaking.

“There are a number of ideas on the table we’re talking about,” Speaker Mike (R-La.) Johnson told The Hill Thursday when asked if leaders plan to address the debt limit through reconciliation or attach it to wildfire aid. “We’re taking all the House Republicans to a big retreat early next week down in Florida, and we'll finalize all those decisions.”

But asked Thursday if Democrats could support a debt ceiling hike attached to California wildfire aid, House Minority Leader Hakeem Jeffries (D-N.Y.) said: “It’s a nonstarter.”

Some GOP members are getting anxious about the lack of clarity into what leadership is thinking on its debt limit strategy.

Republican leaders will have to make a play call soon. Government funding runs out on March 14, and they are hoping to start teeing up the legislative vehicle for Trump’s legislative agenda in February.

Former Treasury Secretary Janet Yellen said in a letter last week that the U.S. would have to start using “extraordinary measures” to meet its financial obligations, and outside analysts project that the “X-date” on which the U.S. could actually default in absence of congressional action will be sometime this summer.

Johnson earlier in the month said it was his “intention” to include a debt ceiling increase in a major bill encompassing Trump’s tax, border, and energy agenda, which will move through a special party-line budget reconciliation process that bypasses the threat of a Democratic filibuster. 

That plan came about after 38 House Republicans in December voted against a funding deal that included a debt limit extension, after Trump — angry at the prospect of Democrats having leverage on the debt ceiling matter during his first year in office — called on Republicans to get it done under former President Biden. Fiscal hawks wanted significant spending cuts as a condition of raising the debt limit.

Republicans then struck a handshake agreement to raise the debt limit by $1.5 trillion as part of the reconciliation bill — removing the Democratic leverage point. But the deal also included $2.5 trillion in net spending cuts, a prospect that would severely complicate an already-ambitious legislative agenda that is facing demands from fiscal hawks to be deficit neutral.

In meetings at Mar-a-Lago before inauguration, GOP lawmakers instead started pitching Trump on an alternative debt limit plays that they hoped to address his concern about Democratic leverage while removing it as a complicating factor in the reconciliation bill — such as pairing it with disaster aid for California wildfires or a bill to avert a government shutdown.

House Majority Leader Steve Scalise (R-La.) after a meeting with Trump at the White House on Tuesday confirmed that the idea of pairing the debt limit with government funding is in the mix.

“We haven’t made a final decision on the debt ceiling,” Scalise said, adding, “Obviously, you’re looking at government funding as well, and there’s possibly an avenue where we would have the debt ceiling in the government funding bill.”

Such a plan, though, would mean that GOP leaders — who can only afford to lose a couple of votes on any party-line measure — would have to rely on Democrats to pass the debt increase.

Rep. Chip Roy (R-Texas) said he “certainly wouldn’t vote” for a bill that included full-year appropriations, a debt limit hike, and disaster aid that is not offset by cuts.

Rep. Andy Biggs (R-Ariz.) has never voted in favor of a debt ceiling increase, but has indicated willingness to do so if it is part of a reconciliation package that includes adequate cuts and other Trump priorities.

“If leadership decides to attach it to disaster funding, that's because they're comfortable with Democrat votes. If they want to actually try bending the spending arc down that they'll put in the reconciliation package,” Biggs said.

And even though the idea is to get support from Democrats, leaders there are signaling that they will not help the Republicans out so easily.

“The Republicans have not opened up any line of communication with us, and they’ve made clear that they have a big, massive, beautiful mandate, which presumably means to us that they intend to pass a spending agreement on their own, to avoid a government shutdown on their own, and to raise the debt ceiling on their own,” Jeffries said Thursday.

“They’ve had no communications with us. It’s not hard to find me. They know where I’m at. They know my number. I haven’t received a single call about a single one of these issues,” Jeffries said.

Rep. Richard Neal (D-Mass.), the ranking member on the House Ways and Means Committee, also said Republicans, who have trifecta control, have the responsibility to raise the debt ceiling.

“I've never heard of anything like that before — conditioning, disaster relief. That never happened in all the years I've been here,” Neal said.

Asked about the prospect of adding a debt hike to a government funding measure with the issue of disaster funding set aside, Neal said: “Well, that’s what negotiations are for.”

And that is exactly what Trump does not want.