WASHINGTON — A senior House Republican told his colleagues on Wednesday that the House must address the federal government’s borrowing limit by the end of the month.
The proposed deadline is a big development in the debt showdown between House Speaker Kevin McCarthy (R-Calif.) and President Joe Biden, who has refused to negotiate with McCarthy while McCarthy has been unable to corral his own conference on a list of specific demands.
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Rep. Kevin Hern (R-Okla.), the chairman of the influential Republican Study Committee, laid down the end-of-month deadline in a letter on Wednesday that was first reported by the Daily Caller.
“Passage of a strong debt limit bill before the end of the April legislative session must be the chamber’s top priority,” Hern wrote.
The government needs to borrow money in order to cover bond payments and other basic expenses.
Since 2001, the government has spent more every year than it takes in. The difference is made up by selling debt to cover those annual deficits. This year, the government has already run up a deficit of more than $1 trillion through March, according to the Congressional Budget Office.
The Treasury Department began bumping up against the $31.38 trillion limit on how much total debt it can issue back in January. Since then, the department has been making various accounting maneuvers to stay just below the limit, while asking Congress to raise it or again suspend it for a period of time.
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Wall Street experts who watch government borrowing expect Treasury to run out of room by late July or early August. However, there’s a small chance a weaker-than-expected tide of income tax revenues this month could move that date up to June. Failing to raise the debt ceiling could cause a financial panic and crater the economy.
If the House passed a debt limit bill this month, that alone would not address the issue, since the bill would need to clear the Senate and be signed by Biden. But a House bill could at least demonstrate that McCarthy has his conference behind him.
For Republicans, a strong debt limit bill likely means legislation that would combine an increase in the government’s borrowing authority with some sort of spending cuts — though Hern did not suggest anything specific, and Republicans have struggled to coalesce around a set of demands. The Republican Study Committee in March produced a “Debt Limit Playbook” calling for a reversal of recent increases in discretionary spending, a not-too-specific idea McCarthy echoed in a recent letter to Biden.
But it’s not clear if McCarthy and Hern are on the same page, as McCarthy and his lieutenants have been in disarray of late. House Budget Committee Chair Jodey Arrington (R-Texas) said in March that Republicans were working on a “term sheet” to present to Biden, only for McCarthy to tell reporters, “I don’t know what he’s talking about.”
A spokesperson for McCarthy did not immediately respond to a request for comment.
McCarthy is slated to make a high-profile speech Monday at the New York Stock Exchange. While his office has said only that it would be about the U.S. economy, the venue and timing would be ideal for putting pressure on the Biden White House to come to the table on the debt ceiling.
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Earlier this month, the White House noted the disarray among Republicans as an obstacle to negotiation.
“House Republicans can’t negotiate the budget with President Biden until they finish negotiating with themselves,” White House spokesman Andrew Bates said in a statement.
