WASHINGTON (MNI) - When congressional Republicans pushed legislation early this year to suspend the statutory debt ceiling until May 19, some analysts assumed the GOP was bowing to President Barack Obama's demand that the debt ceiling be removed from future fiscal negotiations.
However in the last week, the two Republican leaders in Congress have signaled very clearly that their decision at the start of the year was a tactical retreat and the GOP still believes the debt ceiling provides critical leverage to exact changes in fiscal policy from the Obama administration and congressional Democrats.
At a recent press conference, House Speaker John Boehner was asked if he intends to demand later this year spending cuts of at least the same size as any debt ceiling increase. He offered a one word response - "yes" - and pivoted to take the next question.
And Senate Minority Leader Mitch McConnell said Tuesday that he expects the debate this summer on increasing the debt ceiling will be linked with deficit reduction proposals, adding there is a long history of merging the two matters.
McConnell told reporters that Republicans have had "some pretty constructive discussions' with Obama on fiscal matters in recent weeks, but added that it will probably require the urgency of increasing the debt ceiling to persuade Obama to accept entitlement reforms.
"It is not too late, but the clock is ticking," McConnell said about the urgency for entitlement reforms.
Both the House and Senate are now working on fiscal year 2014 budget resolutions. Not surprisingly, the plans offered by House Budget Committee Chairman Paul Ryan, a Republican, and Senate Budget Committee Chairman Patty Murray, a Democrat, chart fundamentally different fiscal courses.
Ryan cuts future deficits by spending cuts and assuming the repeal of the 2010 health care law. Murray controls future deficits by an equal package of spending cuts and new revenues.
Ryan and Murray are expected to pass their FY'14 blueprints on party line votes in their respective chambers. There seems little possibility they will reach an agreement on a compromise plan.
But Boehner has said that he hopes the two budgets will show some "common ground" that might provide a basis for deficit reduction later this year.
Budget resolutions set broad spending and revenue goals and make deficit estimates. Budget law requires Congress to approve a final budget resolution by April 15.
"While the chances of a Grand Bargain this year are pretty small, I think there is a little more hope for some kind of agreement that cuts the deficit, increases the debt ceiling and perhaps adjusts sequestration," said Bob Bixby, executive director of the Concord Coalition.
"I think the President's 'charm' offensive and the willingness of Republicans to talk with him suggest that there is a chance of making some progress in cutting the deficit," Bixby added.
Obama's FY'14 budget will be released the week of April 8, more than two months late. Analysts will scour the plan to see if it's an overture to Republicans for a new round of budget talks.
--MNI Washington Bureau; tel: +1 202-371-2121; email: [email protected]