Feb. 11 (Bloomberg) — House Republican leaders are proposing an increase in the debt limit for one year that would include benefits for military retirees, even as some lawmakers said the plan would need Democratic votes to pass.
House lawmakers may vote on the plan, which would suspend enforcement of the debt limit until March 15, 2015, as soon as tomorrow. If it doesn't pass, several Republicans said the next step would be a measure favored by President Barack Obama and Senate Democratic leaders that lifts the borrowing limit without conditions.
"We can't allow the country to default, and this moves the process forward," Representative Charlie Dent, a Pennsylvania Republican, said after a private meeting of House Republicans late yesterday. "If the votes aren't there, at some point we'll have to vote on a clean bill."
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House Speaker John Boehner has struggled to find enough support from divided Republican lawmakers to increase the debt limit, joking last week that he'd have trouble getting enough votes from them even if the measure authorized sainthood for Mother Teresa.
Business groups have urged Congress to raise the debt ceiling as soon as possible to assure companies that the U.S. government won't default on its obligations.
The U.S. Chamber of Commerce, the country's largest business lobbying group, said in a letter to lawmakers yesterday that quick passage would avoid "collateral stresses so often inflicted during similar episodes in recent years."
Democratic votes
Republicans aligned with the small-government Tea Party movement have urged Boehner to advance a debt-ceiling bill with no conditions, and let a majority of Democrats — along with some Republicans — vote to pass it. That's how Congress ended a 16-day partial government shutdown in October.
"My preference is a clean debt-limit vote that I will vote against," Representative Thomas Massie, a Kentucky Republican, told reporters yesterday. "It seems like that's where we'd otherwise end up."
To attract Democratic votes, the Republican proposal would make reductions in military pensions apply only to people who enlist after Jan. 1, 2014. It would restore cost-of-living adjustments for current service members that were reduced in a December budget deal.
The measure's cost would be covered by extending required cuts in programs, including Medicare, for one year. The cuts, known as sequestration, would be extended until 2024.
The Republican plan would also create a $2.3 billion fund to avert cuts in Medicare reimbursements to doctors.
'Let's see'
House Democratic leaders said they wanted to see the proposal in writing before commenting on it.
"We want to have as clean a vote as possible so we don't default on our debt," Representative Xavier Becerra of California, chairman of the House Democratic Caucus, said yesterday. "Let's see what they come up with."
The plan would face long odds in the Democratic-controlled Senate, where Majority Leader Harry Reid insists on a debt-limit increase without conditions. Reid's spokesman, Adam Jentleson, said Democrats "will have to wait and see what they pass."
The Senate this week is taking up a stand-alone version of legislation restoring the veterans' benefit adjustment.
White House spokesman Jay Carney yesterday reiterated Obama's stance that he won't negotiate with Republicans over raising the debt limit.
"We'll take Republican leaders at their word when they say they won't let the United States default," Carney said.
Five days
A suspension of the U.S. debt limit enacted by Congress in October expired Feb. 7. Treasury Secretary Jacob J. Lew said last week that borrowing authority may not last past Feb. 27.
Including today, House lawmakers have five working days scheduled before then. Congress plans to be out of session the week of Feb. 17 and will return to Washington the week of Feb. 24.
Lew, who is using so-called extraordinary measures to stay under the limit, urged Congress yesterday to raise the limit to avoid "potentially catastrophic consequences."
Representative Lynn Westmoreland, a Georgia Republican, said the debt ceiling proposal would need Democratic votes. Republican leaders started counting votes after the private meeting last night, he told reporters.
The one-year extension of the automatic spending cuts would apply to mandatory programs, said Representative James Lankford of Oklahoma.
Military benefits
The required cuts include a 2 percentage point reduction in Medicare reimbursements to providers, or $11 billion in 2013, according to a 2012 summary by the Center for Budget and Policy Priorities, a Democratic-leaning advocacy group based in Washington.
Other mandatory cuts include student loans, vocational rehabilitation, mineral leasing payments and social services block grants, according to a summary prepared by the center.
Lawmakers support the proposal to repeal the cuts in military benefits, "but not necessarily at the expense of Medicare," Representative Richard Nugent, a Florida Republican, said in an interview.
Marillyn Hewson, chief executive officer of Lockheed Martin Corp., said yesterday at a Bloomberg Government breakfast in Washington that U.S. companies want certainty from Congress on budget and debt issues. The CEO of the Bethesda, Maryland-based contractor said she is "hopeful" lawmakers will raise the debt ceiling without delay.
"These elements of uncertainty, when the economy is coming back and things are starting to look better, good jobs and economic growth, these overhangs can stifle that growth," she said.
The proposal would advance as a House amendment to an unrelated Senate bill, S. 540.
With assistance from Kathleen Hunter, Gopal Ratnam, Richard Rubin, Ian Katz, Kasia Klimasinska and Roxana Tiron in Washington.
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