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High anxiety hits Senate over raising debt ceiling


Reported

Senators are growing anxious that they might have to vote to raise the nation’s debt ceiling in a matter of weeks given new estimates that the government could hit its borrowing limit earlier than expected. The debt limit was exceeded earlier this year, and the Treasury Department is now taking steps known as “extraordinary measures” to prevent the government from going over its borrowing limit.

Lawmakers had hoped they would be able to avoid the politically painful vote to raise the debt ceiling until the fall — and that it could be packaged with other legislation to fund the government and set budget caps on spending. But that could be much more difficult if Treasury’s ability to prevent the government from going over its borrowing limit ends in mid-September — just days after lawmakers would be set to return from their summer recess.

“I think we need to hustle to a caps deal as soon as we possibly can and include the debt limit in it, no doubt,” said Sen. Shelley Moore Capito (R-W.Va.), a member of the Senate Appropriations Committee.

The debt limit has been far from the front page and has been essentially put on the back burner as lawmakers debate the treatment of migrants at the border and battle over nominations and spending bills. Members of the Appropriations Committee on Tuesday were openly skeptical about whether their colleagues would jump on the issue.

“The question is, will anybody act until the urgency is on top of us?” said Senate Appropriations Committee Chairman Richard Shelby (R-Ala.). “We need to avoid the brink.”

Failing to raise the debt ceiling would be a catastrophic move that could roil worldwide financial markets. Shelby said the mere possibility that the debt ceiling could be breached in September should give “more sense of urgency” to Congress taking quick action, while Capito said it was not in “anybody’s best interest to have that fight in September up against the debt limit.”

A study released this week by the Bipartisan Policy Center said there was a “significant risk” that the government could reach its debt limit in early September unless Congress raises the cap. The estimate was a shift from its previous forecast, which estimated the debt limit could be reached in October or November, which would give Congress more breathing room.

The earlier timeline comes after Treasury Secretary Steven Mnuchin told Congress in May that the debt ceiling increase could happen in “late summer.”

Sen. John Thune (S.D.), the No. 2 Senate Republican, said it would be “preferable” for Congress to deal with the debt ceiling before leaving for the August recess, adding that a mid-September deadline “puts a lot of pressure” on lawmakers to act.

“We could write a caps deal and attach the debt limit to it, to kind of get those issues resolved before August, which I think would be in everybody’s best interest,” Thune said.

Getting a deal done this month leaves little room for error, and few are optimistic such a timeline will be met. The House is scheduled to leave town on July 26, while the Senate is set for vacation on Aug. 2. Lawmakers would return after Labor Day, on Sept. 9, which could give them less than a week to cobble together a deal.

Speaker Nancy Pelosi (D-Calif.) on Tuesday didn’t rule out action on the debt ceiling this month.

“We’ll see how those conversations go. We certainly do not want any default on the part of the full faith and credit of the United States of America,” she said. “That’s never been what we’ve been about, but there are those on the Republican side who have embraced that again and again. So, we’ll see.”

Senate Majority Leader Mitch McConnell (R-Ky.) appeared confident during a weekly leadership press conference that lawmakers wouldn’t let the United States default on its debt, but he didn’t offer a clear pathway to approving a debt ceiling increase.

“Time is running out, and if we’re going to avoid having either short- or long-term CR or either a short- or long-term debt ceiling increase, it’s time that we got serious on a bipartisan basis to try to work this out and not have the kind of chaos that goes along with our inability to come together on these important issues,” McConnell said. A CR, or continuing resolution, would fund the government at current spending levels.

Asked if Congress had to raise the debt ceiling before the August recess, McConnell sidestepped the question, saying lawmakers are in close contact with Mnuchin about the timeline but that he doesn’t “think there’s any chance that we’ll allow the country to default.”

Broader budget talks on the debt ceiling and government funding unraveled last month, with the White House floating a one-year CR and debt ceiling hike. Senate Republicans are hoping to jumpstart the negotiations with new meetings as soon as this week, though nothing was on the books as of Tuesday afternoon.

The spending deal is also crucial, as spending cuts triggered by an earlier budgetary law would snap into effect in January if Congress does not approve new spending levels. The debt ceiling fight has always had an earlier deadline, but the new estimates are moving it up further.

Shelby argued that it makes sense to link the two issues but didn’t rule out that the debt ceiling could get a stand-alone vote, or be attached to another must-pass bill, in a time crunch.

“The path is a good question,” Shelby said. “You could raise the debt ceiling without getting a caps deal, but it makes more sense to me that if you can run them parallel, they are two big issues staring us in the face.”

 

Senate Republicans unveil revised healthcare bill


Reported

Senate Republican leaders on Thursday unveiled a revised version of their bill to repeal and replace ObamaCare as they race toward a high-stakes vote next week. The measure includes changes intended to win over additional votes, with leadership making concessions aimed at bringing both conservatives and moderates on board. (READ THE BILL HERE.)

But Senate Majority Leader Mitch McConnell (R-Ky.) is facing a tough task in finding enough votes to pass the bill. Sens. Susan Collins (R-Maine) and Rand Paul (R-Ky.) appear to be firmly against the measure, and one other defection would kill the bill. Overall, McConnell appears to have shifted the revised bill more toward the conservatives than the moderates.

Importantly, the bill largely keeps the Medicaid sections the same, meaning that deeper cuts to the program will still begin in 2025, and the funds for ObamaCare’s expansion of Medicaid will still end in 2024. The changes to Medicaid have emerged as a top concern for moderates such as Sens. Rob Portman (R-Ohio), Shelley Moore Capito (R-W.Va.) and Lisa Murkowski (R-Alaska).

The Congressional Budget Office (CBO) found that those Medicaid changes in the original bill would result in 15 million fewer people being enrolled in the program and cut spending by $772 billion over 10 years.

Collins said she still plans to vote against a motion to proceed to the bill, adding that the legislation should move through the normal committee process.

“My strong inclination and current intention is to vote no on the motion to proceed,” Collins told reporters after leaving a briefing on the legislation.

“The only way I’d change my mind is if there’s something in the new bill that wasn’t discussed or that I didn’t fully understand or the CBO estimate comes out and says they fixed the Medicaid cuts, which I don’t think that’s going to happen.”

For the conservatives, the measure includes a version of an amendment from Sens. Ted Cruz (R-Texas) and Mike Lee  (R-Utah) aimed at allowing insurers to offer plans that do not meet all of ObamaCare’s regulations, including those protecting people with pre-existing conditions and mandating that plans cover certain services, such as maternity care and mental healthcare.

Conservatives argue the change would allow healthier people to buy cheaper plans, but moderates and many healthcare experts warn that premiums would spike for the sick people remaining in the more generous insurance plans.

Cruz said he will support the bill so long as the provisions he sees as a priority are not changed in amendment votes on the floor.

“If this is the bill, I will support this bill,” Cruz told reporters after a meeting of GOP senators. “Now, if it’s amended and we lose the protections that lower premiums, my view could well change.”

Senate Republicans had vowed to not change the ObamaCare protections for people from being charged more based on their health in their bill, which is why the debate over the Cruz-Lee amendment has been heated. A Senate GOP aide said Thursday it is possible that the Cruz amendment would not be analyzed by the CBO in time for the vote next week. It is possible the Department of Health and Human Services could provide an alternative analysis.

Lee cautioned that he was not involved in the changes to the proposal, including the amendment, and would have to review the new language before deciding whether to support it. The bill does include new funding, $70 billion over seven years, aimed at easing costs for those sick people remaining in the ObamaCare plans.

However, the new measure does not boost the generosity of the tax credits, as some moderates wanted. It still replaces ObamaCare’s tax credits to help people afford insurance with a smaller, scaled-down tax credit that provides less assistance.

The Kaiser Family Foundation found premium costs would increase an average of 74 percent for the most popular healthcare plan, given the reduced assistance in the GOP bill.

The new measure will leave in place two ObamaCare taxes on the wealthy, in a departure from the initial bill.

That original measure lacked the support to pass, as more moderate members pointed to the CBO’s finding that 22 million fewer people would have insurance over a decade.

Senate Republicans are now awaiting a new score of the revised legislation from the CBO, which could come early next week.

The new bill does include $45 billion to fight opioid addiction, but moderates such as Capito and Portman who hail from states where the problem is rampant have said they also want changes to the Medicaid portion of the legislation.

Portman said his position on the bill had not changed, but he did not give a clear answer on whether he’d back his party on the procedural vote.

“I’m the same position I’ve been in. I’m looking at the language,” he said.

Capito also said she doesn’t know whether she’ll vote to proceed to the bill.

“We have another meeting this afternoon on the Medicaid cuts,” she told reporters. “I need to really look at it, look at the score; I still have concerns.”

Asked if she would vote for the motion to proceed next week, she said, “Wait and see.”

In a change that could appeal to Murkowski, the bill sets aside 1 percent of the stability funds for states with costs that are 75 percent above the national average, which would benefit high-cost states like Alaska.

— This story was updated at 3:15 p.m. Alexander Bolton contributed.

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