Speaker Mike Johnson on Tuesday backed away from a plan to address the approaching federal debt cliff in a party-line reconciliation package, acknowledging several major challenges that may force Republicans to deal with the borrowing limit in bipartisan talks with Democrats.
Those obstacles include fractious House conservatives and ongoing strategic disputes with the Senate. Addressing the debt limit in reconciliation is not “completely foreclosed,” Johnson said at a POLITICO Live event, but he said House leaders were “looking at all options.”
“I’m not wed to any of them,” he said.
Striking a deal with Democrats to raise the debt ceiling would enrage the House’s conservative hard-liners. But President-elect Donald Trump — who has urged Johnson and other leaders to quickly address the debt cliff — appears to be softening to the idea, according to House Republicans who attended meetings with Trump at Mar-a-Lago this weekend.
Several members raised the pitfalls of the reconciliation approach in those meetings, and Trump appeared open to instead dealing with it in the bipartisan government funding talks — potentially by tying it to federal disaster aid that could benefit wildfire-stricken Southern California.
The Treasury Department has not given a precise date when the federal government will potentially default, but Congress might only have a few months to act.
Conservative hardliners are demanding deep spending cuts in exchange for supporting a debt limit hike, a major challenge if Johnson is going to keep his tight majority united. They want Johnson to uphold a plan GOP leaders floated in December to make $2.5 trillion in spending reductions as part of any reconciliation package that increases the debt limit.
But that level of cuts might only buy a short reprieve from default. Now Johnson is exploring punting the debt limit for the whole of Trump’s presidency, according to a person familiar with the matter. Doing so would require Republicans making significant concessions to Democrats in bipartisan negotiations — something sure to anger the House GOP’s right flank.
Asked by POLITICO’s Rachael Bade whether the debt-limit-in-reconciliation plan is now dead, Johnson said “it was meant to be a point of discussion” and “we have to begin somewhere.”
There are also persistent doubts that even if significant cuts are made, some House conservatives simply won’t vote for any bill that includes a debt ceiling hike. Johnson said he was confident even skeptical members would come along “if the conditions are right.” But he also noted some of the other political realities that could block such a route.
They include ongoing disputes with the Senate. He confirmed he spoke with Majority Leader John Thune about reconciliation planning several weeks ago, with Thune suggesting “it might be a heavy lift” to add a debt limit hike to the already tall reconciliation order.
A growing group of senior House Republicans are now coalescing around a push to address the debt limit as part of federal funding talks ahead of a March 14 shutdown deadline. Those talks would involve Democrats and would likely include wildfire aid to California.
Asked about a possible debt-limit-for-fire-aid deal, Johnson said, “We don’t play politics with disaster aid.” But he added that there should be a discussion about policy strings that might be attached to the money to prevent future fires.
