White House budget director: Debt ceiling issue lacks a plan
WASHINGTON — The White House lacks a unified plan to increase the government’s borrowing cap as a likely September deadline is drawing near, saidMickMulvaney, director of the Office ofManagement and Budget.
A failure by Congress to raise the debt ceiling could send dangerous shockwaves through the global economy. The federal government could be at risk of defaulting on obligations such as interest payments on bonds as well as temporarily halting benefit programs.
Mulvaney suggested in an interview Thursday that neither the Trump administration nor Capitol Hill lawmakers have set their terms for an agreement.
“It’s fair to say we haven’t settled on a final way to address the debt ceiling any more than the Hill has,” Mulvaney said.
The former South Carolina congressman added that none of thiswas necessarily “unusual.”
Under the current borrowing restrictions, the government has already been taking extraordinary measures and will likely be unable to pay its bills at some point in September. But Congress has a recess scheduled in August that could create time pressures. Private analysts say the debt ceiling deadline could be extended into October.
Mulvaney said he would like to see the debt ceiling raised in July.
But Trump administration officials still have yet to resolve internal differences on the best strategy to increase the legal cap on government debt, which already exceeds $19.8 trillion.
Mulvaney suggested he would like to have any increase in the borrowing authority be attached to
other spending changes, a move that could attract Republican support but alienate Senate Democrats. President Donald Trump’s budget proposal seeks to beef up spending on the military and border security while cutting many social programs.
Treasury Secretary Steve Mnuchin has indicated he would like a “clean” bill to raise the debt ceiling, so it would not have to be tied to any spending changes, but Capitol Hill conservatives are resisting the idea.
Mulvaney said Mnuchin would ultimately be in charge of handling the debt ceiling push “once we do settle on our formal policy, ifwe do.”
A 2011 standoff between Republicans and the Obamaadministration over the debt ceiling led to tighter controls on spending.
That standoff was not
resolved until the 11th hour and prompted Standard & Poor's to impose the firstever downgrade to the country’s credit rating.
The Trump administration is also engaged in talks with House and Senate Republican leaders about what kind of increase they could possibly pass.
Mulvaney said the issue was not a source of division inside the White House or the Republican Party.
The discussions involve whether the House should increase the debt limit enough to last through the 2018 election or the president’s first term.
Congress also faces pressure to pass a budget in September for next fiscal year, as well as to address administration priorities that include a tax-code rewrite and the proposed repeal of President Barack Obama’s 2010 health insurance law.