• Check out a timeline of the federal government shutdown. * * *
WASHINGTON — As the federal government shutdown drags on, the next fiscal crisis is lurking just around the corner — the debt ceiling.
Unless Congress approves a change, the government will soon — perhaps within a week — hit its legal limit for borrowing money to pay for current programs.
“This is a major issue,” said Rep. Lee Terry, R-Neb. “The debt ceiling is not something you mess around with. It has an impact all across our economy.”
Republican lawmakers, including those from Nebraska and Iowa, want concessions from Democrats in exchange for supporting a debt limit increase above the current $16.7 trillion. Because many Democrats disagree with linking the debt ceiling to other issues, that could set up an impasse similar to the one that led to the shutdown.
Unlike the current dispute, however, the looming fight over the debt limit may focus more on spending levels than on policy issues such as the Affordable Care Act, the new health care law.
Rep. Jeff Fortenberry, R-Neb., noted that the most recent deal to raise the debt ceiling included spending cuts, which he described as “reasonable.”
“You have to use these moments to try to get underneath the policy that is driving the debt,” Fortenberry said. “It's irresponsible to not pay our bills. It's irresponsible not to drive down the cause of the debt.”
Terry agreed. He said it's appropriate for Republicans to insist that raising the debt ceiling include some attempt at reining in spending.
“If we're 38 cents short on every dollar, we need to figure out how to make that 38 cents smaller and maybe a pathway to zero,” Terry said.
The Obama administration has pegged Oct. 17, one week from now, as debt ceiling D-Day — the point at which the government starts bouncing checks.
Estimating that date is not an exact science. Money flows into the federal Treasury daily from a variety of sources. A look at your pay stub shows a few examples: withholding for Social Security, Medicare and federal income taxes.
The money flows out as well — and at a faster rate — for federal employees and contractors' pay, interest on the national debt, Social Security benefits and Medicare reimbursements to doctors and hospitals.
Because there's more than enough money coming in to cover interest payments alone, some Republicans, including Sen. Chuck Grassley of Iowa, contend that a delay in raising the debt ceiling doesn't have to affect the nation's creditworthiness.
“It seems to me that it's just a matter of prioritizing,” Grassley said.
But that's some tough prioritizing. Servicing the existing debt is one thing, but if you add big-ticket spending items that have broad-based political support — Medicare and Medicaid, Social Security and national defense — it doesn't take long before the bills exceed revenues.
And no lawmaker from Nebraska or Iowa is proposing to eliminate Social Security or the Pentagon.
Democrats say it's hypocritical for Republicans to oppose a straightforward increase in the debt ceiling. After all, they say, government has to raise the debt ceiling because of past congressional actions that authorized spending programs or tax cuts.
All recent budgets, even those written by Republicans, envision significant deficits for years.
Many Republicans acknowledge that, but they point out that there's plenty of precedent for tying debt ceiling increases to changes in federal spending.
Republicans have also raised the possibility of linking an increase to a host of policy provisions — defunding the health care law, approving the Keystone XL pipeline or passing tax overhaul legislation.
Democrats continue to push for a no-strings-attached increase in the debt ceiling. They are expected to bring one up in the Senate later this week.
That bothers Sen. Mike Johanns, R-Neb. He has criticized his colleagues for using budget showdowns as a way to roll back the Affordable Care Act, calling that strategy ineffective. While he opposes the health care law, he wants the debt ceiling debate to focus on fiscal issues.
But Johanns said Senate Majority Leader Harry Reid, D-Nev., has gone too far in asking for a “blank check” in the form of a yearlong, trillion-dollar increase in the limit.
“He doesn't want us to have any input, he doesn't want to negotiate, he doesn't want to talk to us,” Johanns said. “I just think that's overreaching. I think he's trying obviously to gain some political advantage here rather than solve the problem.”
Rep. Tom Latham, R-Iowa, is looking for an increase in the ceiling to be tied to “spending reforms.” Rep. Adrian Smith, R-Neb., said the debt ceiling “may be the best opportunity to pass needed reforms.”
Rep. Steve King, R-Iowa, said he is unconcerned about the administration's Oct. 17 deadline, but he said there are scenarios in which he would support an increase in the debt ceiling.
In particular, he proposed that the House and Senate agree to send the states a balanced-budget amendment to the Constitution for ratification.
“That'll get me there,” King said. “Because that would set the states up to ratify and make us responsible here in this Congress again. We've got to get to balance.”
Sen. Deb Fischer, R-Neb., likes to say that the debt ceiling increase is not automatic.
“There's a reason it has to come up for a vote, and that's because it gives us really one of the few opportunities to be able to discuss our financial situation that we're in, and that's why I'm here,” she said. “I ran saying this country is spending too much and Nebraskans agree with that, and if we're going to have any opportunity to address that, we should grab it.”
Sen. Tom Harkin, D-Iowa, has a much different view of the debt ceiling.
He says the whole concept of a debt ceiling is unconstitutional in light of the 14th Amendment. That's the part of the Constitution that states the validity of U.S. public debt “shall not be questioned.”
Harkin has urged President Barack Obama to ignore Congress and raise the debt ceiling himself.
Obama has rejected that interpretation, but Harkin said the president is listening to the wrong experts. If the government defaults, Harkin said, he will blame Obama right along with the Republicans who refused to raise the debt ceiling.
“If he does not raise it himself under the 14th Amendment, clause four, I think that he would be acting unconstitutionally,” Harkin said. “He is not upholding his constitutional oath of office to uphold and defend the Constitution.”