Price for going along with the increase could include some form of down payment on spending cuts.
Senate conservative leader Jim DeMint, R-S.C., said Wednesday he would not stand in the way of hiking the $14.3 trillion statutory debt ceiling, which Congress will have to tackle early next year to avoid default on U.S. government obligations. Republicans will extract a price for such action, however, which may include some form of down payment on spending cuts.
"You don't have much choice if you charge something on your credit card. You have to pay it, and that's effectively what this debt limit is," DeMint said in an interview with National Journal. "If Republicans have to do that on their own, they need to attach some legislation to it that forces us to move towards a balanced budget. Otherwise, I think the American people are going to look at us and say, 'The Republicans still don't get it.'"
DeMint voted against the last debt-limit increase in January, which gave the Treasury an extra $2.1 trillion in breathing room, because there were no spending control mechanisms attached to it. He told NJ that he was not in favor of shutting down the government, however, which is what blocking a debt limit hike would essentially achieve.
"If there was any way we could get around it, we need to do it. But again, we've already spent the money. The question is now, do we shut down the government, or do we fund what we've already done?" he said.
As of Monday, the official government tally of debt subject to the limit stood at $13.7 trillion. At its current pace, budget analysts say, that could easily breach the current debt ceiling by February, setting up an early game of chicken between newly empowered Republicans and President Obama.
When asked Wednesday about the looming debt limit fight, the likely House Speaker, John Boehner, R-Ohio, told reporters no decisions have been made. "We'll be working that out over the next couple months," he said.
On the campaign trail, tea party candidates and conservative groups like the Center for Individual Freedom stumped against Democrats who supported the earlier debt limit increase this year.
Treasury has several tools at its disposal to forestall hitting the limit, such as delaying the reinvestment of government securities in federal employee pension plans. Those maneuvers, while frequently used in both Democratic and Republican administrations, generally have a short shelf life. Presumably they could push a vote off until the spring, right around the time incoming House Budget Chairman Rep. Paul Ryan, R-Wis., will be writing a fiscal blueprint for the next several years.
Using the budget process, Ryan could include "reconciliation" instructions to the relevant committees to cut spending within their jurisdictions, even in entitlement programs, in exchange for signing off on a debt limit increase. In an interview, Ryan was coy about his plans but acknowledged he may have some leverage in this instance. "I'm not going to negotiate through the press," he said.
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