Morning Action: As the Nation Hits Debt Ceiling, Outlook on Debt is Somber
DEBT CEILING. By the end of the week we will hit the nation’s debt ceiling again, and the Heritage Foundation notes how grim the picture is:
For starters, “The nation’s fiscal situation is much worse today than when President Obama first took office,” says Romina Boccia, Heritage’s Grover M. Hermann Fellow.
The outlook on the debt is somber. Entitlement spending continues to grow on autopilot, and “Washington’s failure to handle the problem responsibly means a higher tax burden and a slower economy for younger generations,” Boccia explains.
The debt drags down the economy—it has contributed to America’s drop in the Heritage Foundation/Wall Street Journal Index of Economic Freedom rankings. The U.S. dropped out of the top 10 freest nations this year.
Politico reports the internal dynamics surrounding the debt ceiling:
The problems Republicans face here are of their own making. In 2011, Boehner set the standard for using the debt ceiling to lower the deficit. Now, conservatives expect it.
Rep. Steve Scalise (R-LA) 58%, the chairman of the conservative Republican Study Committee, said in an interview he would like to see structural changes to mandatory spending in exchange for raising the debt limit. Rep. Joe Barton (R-TX) 63% suggested $1 in spending cuts for every $2 in increased borrowing authority. Rep. Vicky Hartzler (R-MO) 69% said “we have to get something for that vote.”
In fact, Republican leadership is trying to give Hartzler what she wants — at least temporarily. Nearly every senior lawmaker and aide in and around leadership knows that they will eventually have to pass a clean debt limit — or a bill with a token concession from Democrats. And that’s why people like Rep. Raul Labrador (R-Idaho) would rather Boehner pass a clean debt limit, and give up the high-stakes theater.
IMMIGRATION. Contrary to some reports, the House GOP leadership is actively working behind closed doors on immigration. Yet, the Wall Street Journal reports (sub. req’d) that opponents to immigration reform among House members are “casting fresh doubt on changes for legislative movement on immigration this year.”
The focus of opposition within the House GOP is less on sensitivities over amnesty or a potential flood of unneeded new workers, and more on politics. Opponents say they worry that moving ahead on the issue could divide Republicans and hand Democrats a victory in an election year when the GOP has the advantage. Many Republicans also question whether President Barack Obama would enforce the law if one is passed.
Rep. Raúl Labrador (R., Idaho), a tea-party-backed conservative who has been viewed as a potential backer of immigration legislation, said Wednesday that “there was overwhelming support for the idea of doing nothing this year” when the issue was discussed at last week’s GOP retreat. “It’s a mistake to have an internal battle this year about immigration,” he said.
CANTOR. Rep. Eric Cantor (R-VA) is taking the lead on developing the GOP’s Obamacare replacement proposal:
The extraordinarily tough task faces many obstacles and is complicated by election-year politics and an unruly GOP conference.
But Cantor believes the Republicans must shake their “party of no” reputation, and passing an ObamaCare replacement bill is part of that strategy.
Most, if not all, Democrats will reject whatever Cantor produces. To pass a bill through the House, Republicans will need to keep defections to about 20 or fewer. That will be a tall order.
IRS. Republicans are blasting the IRS for its rules surrounding classification of tax-exempt groups and are questioning the agency’s motivations (sub. req’d):
House Ways and Means Chairman Rep. Dave Camp (R-MI), rebuked the White House at a subcommittee hearing on Wednesday over Internal Revenue Service regulations he said “were drafted in a manner, in my view, intended to shut down tea party groups.”
Camp pointed to e-mails between Treasury Department and IRS officials from 2011 and 2012, before an inspector general’s report cited the handling of politically active groups. “The truth is that our investigation has revealed that the regulations weren’t drafted as a remedy to targeting,” Camp said. “In fact, they were being worked on in 2011, during the time of the targeting, as another line of attack against these groups.”
DOC-FIX. Negotiators may be close to a deal on a “doc-fix” for physician Medicare reimbursements (sub. req’d):
Lawmakers working on the Medicare physician payment issue are in hurry up mode. A temporary payment patch (PL 113-67) expires on March 31, after which doctors could face an estimated 24 percent cut under the existing formula. What’s more, Baucus, who could leave the Senate within days, is a key player since the Finance Committee he heads has jurisdiction over the health program.
Members of Finance, House Energy and Commerce and House Ways and Means are trying to combine versions of bills (HR 2810, S 1871) to replace the formula, known as the sustainable growth rate, without having to enact another doc fix.
Staff members are said to be asking members of the GOP Doctors Caucus to sign onto a provision that would provide 0.5 percent annual payment updates to providers for five years, with no guaranteed updates for the following five years. Another option would include annual payment updates of 0.4 percent per year for 10 years, as well as changes to a system for assessing quality of care.