Debt Ceiling Politics

Aug 9, 2017

The debt ceiling will need to be lifted in September as the Treasury’s wiggle room and accounting tricks will run out. President Trump wants a “clean,” no strings attached increase in the debt ceiling. Democrats and Republicans plan throw up roadblocks to win concessions for supporting the increase. Conservatives insist that spending reforms be implemented if leaders want their support. The Republican Study Committee and the House Freedom Caucus want spending cuts. Alternatively, conservatives might be willing to drop their demands if the Treasury instead is permitted to sell off assets like property and mortgage-backed securities. If Congressional leaders are to deliver a “clean” increase, they will need the support of Democrats. Democrats are insisting that any tax reform be accompanied by significant concessions. Senator Schumer says that Democrats will refuse to vote for the increase unless Republicans abandon tax cuts that would add to the deficit. If the past is prologue, then high stakes political theater will be coming soon to televisions screens around the country.