On Thursday, Treasury Secretary Jack Lew said the US would exhaust its borrowing authority in late February, rather than early March as originally estimated. If Congress doesn’t lift the debt ceiling by then, the government would have to prioritize its payments to avoid missing interest payments on its debt.
Lew and Obama continue to insist that they won’t negotiate over the debt ceiling. They want Congress to pass a “clean” debt increase, i.e. no other provisions or strings attached. Debt deals usually include spending cuts or other provisions.
A Republican Congressman told Breitbart News this week that there “won’t be a clean bill.” Politically, this source is in the middle of the spectrum in the House caucus. He said there are almost no votes in the GOP for a “clean” debt hike.
A deal doesn’t have to be restricted to spending cuts. A deal to lift the debt ceiling during Clinton’s term, for example, included several regulatory reforms. Given that both sides are eager to set budget battles aside until after the November elections, it is increasingly likely that the GOP will push for policy concessions rather than spending cuts.
A lot of rumors on the Hill suggests that approval of building the Keystone Pipeline could be a key Republican demand. It would provide real economic benefits and support the growing energy sector. It would also ensure that Canadian resources flow to US refineries, rather than being shipped to China. Many labor unions support the pipeline. The only real opposition to it is from the hard-left environmentalists.
Other provisions will be floated between now and the end of February. Obama may continue to refuse to negotiate, but with approval ratings around the lowest of his Presidency, he doesn’t have the political capital to do that. This may be the best chance to get the pipeline finally built.