© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
January 16, 2014 7:20 pm
The Obama administration is testing the fragile new mood of compromise in Congress reflected in the bipartisan budget deal, with a call for Republicans to quickly lift the country’s borrowing limits.
In a sign of weakened Tea Party influence, the Republican-controlled House passed the $1.1tn budget on Wednesday by 359 to 67 votes and the Senate by 72 to 26 votes on Thursday evening.
But the next hurdle for the newly ascendant, more pragmatic Republican leadership is only weeks away, with the US due to hit its borrowing limits on February 7.
Sticking to the position it adopted in a showdown with Republicans last year, the White House says it will not negotiate over lifting the country’s debt limit, saying Congress should do so without attaching any conditions.
“It’s a mistake to wait until the eleventh hour. Congress should do this as quickly as possible and with the least drama as possible,” said Jack Lew, the Treasury secretary.
The negotiation and passage of a budget has marked a turning point in a Washington which has been gridlocked by bitter fiscal battles for more than three years, with Republicans and Democrats deeply split over government spending.
Tea Party Republicans, who have been instrumental in scuttling a middle path between Republicans and Democrats, often in defiance of their leadership, remain deeply unhappy about Wednesday’s vote.
“I find it fascinating that we complain about big bills when it’s the Democrats that are in charge of Congress, but we love big bills when we’re in charge of Congress,” said Raúl Labrador, an Idaho Republican.
Negotiation and passage of a budget has marked a turning point for Washington, gridlocked by bitter fiscal battles for more than three years
However, the Republican leadership was scarred by last year’s showdown over funding Barack Obama’s health law, which triggered a partial government shutdown, and has worked hard to take budget issues off the table ahead of the November midterm elections.
“I think the Republican leadership fully understands the price they paid for last year’s shutdown and they don’t want to repeat that,” said John Lawrence, a former chief of staff for Nancy Pelosi, the Democratic minority leader.
John Boehner, the Republican house speaker, has in the past demanded spending cuts equivalent to any increase in the debt limit but has not insisted on any similar conditions so far this year.
“We should not default on our debt, and we should not even get close to it,” he said on Thursday.
The debt limit will be reached in early February, and Mr Lew said the “extraordinary measures” used by the Treasury to finance the government temporarily will last for only weeks after that.
We should not default on our debt, and we should not even get close to it
- John Boehner, Republican house speaker
This week’s budget was noteworthy in one respect – Republicans and Democrats agreed on a number for total spending, and then left it to the congressional appropriations committees to apportion the money. The deal covers two years of spending.
In recent years, such a traditional fashion of producing a budget has collapsed in partisan fights, creating an uncertainty which critics say has hurt US economic growth.
“This is the beginning of a process that gets us back to ‘regular order’,” said Mr Boehner.
However, some congressional veterans, while heartened by the budget’s passage, see little fundamental improvement to Congress’s ability to do its job.
“We are a quarter of the way into the fiscal year, and we have finally got a budget,” said Jim Dyer, a former congressional staffer, of the Podesta Group, a lobbying firm. “The trend, basically, is that the congressional budget process is in the tank.”
Additional reporting by Barney Jopson
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in