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More than seven months into the 115th Congress, Republican majorities in both the House of Representatives and the Senate have been notably dysfunctional. President Donald Trump and his White House staff are in disarray. The budget process is way behind schedule, and every day brings the United States closer to what should be the unthinkable: defaulting on the national debt by failing to raise the debt ceiling.

While raising the debt ceiling should be routine, the current mix of political dysfunction and administrative mismanagement could signal trouble ahead with dire consequences. Treasury Secretary Steven Mnuchin says the debt ceiling must be increased by September 29. But Congress is in recess until after Labor Day and President Trump has left town for a seventeen-day golf getaway in New Jersey, leaving only twelve joint days where both the House and Senate are in session to address the issue.

The debt ceiling is like a gun pointed at the entire economy, and this has become an increasingly dangerous game of Russian Roulette. This is not a game the United States should playif it ever wasand the time has come to repeal the debt ceiling for good.

When Congress makes tax and budget decisions resulting in spending greater than revenue, it must make up the difference through borrowing. The debt ceiling is a statutory limit on the maximum amount the federal government can borrow. It is an ineffective tool for fiscal restraint since Congress has already committed to spending the money. Without the ability to borrow, the U.S. government would not have sufficient funds to pay its obligations. This would result in a default, forcing the government to renege on some of its commitments made in law, such as salaries for military and civilian personnel, Social Security benefits, and interest payments on treasury bonds.

The United States has never defaulted on its financial obligations, and the repercussions would be severe. According to a Treasury Department report, a default may lead to a crisis on par or worse than the Great Recession. It would become more difficult to access credit, and the value of the dollar would fall.

A default could cause a sharp spike in interest rates, due to increased risk of investing in U.S. government-backed financial instruments. Homeowners would see housing values plummet. If interest rates increased by five percent, for example, the median home price could decrease by more than $70,000.

Sharply higher interest rates also discourage investment since the cost of borrowing goes up. This means negative effects for the construction industry, auto sales and overall business expansion, leading to fewer new jobs. In fact, higher interest rates from default could mean millions of jobs lost.

Under President Barack Obama, Republicans in Congress attempted to use the debt ceiling to extract policy or budgetary concessions, which took the country dangerously close to default. In theory, raising the debt ceiling today should be a smoother political process, since Republicans control the House, Senate and White House. Yet, it seems some members of the ultraconservative House Freedom Caucus want to deploy similar tactics to force through deep spending cuts. If these members on the far right take this approach again, then they will essentially be holding the Republican Partyand the full faith and credit of the United Stateshostage, and few good things ever come from taking yourself hostage.

Read more here:
Will Republicans Keep Playing Russian Roulette with the Debt Ceiling? - The National Interest Online

The easier lift came Sunday: Illinois state senators voted 38-19 to force into law a new school funding plan, with its comparatively generous treatment of Chicago Public Schools. The vote was a rebuke to Gov. Bruce Rauner and his rival proposal: The governor would give less to CPS but more to many other Illinois districts, especially those that also educate sizable numbers of disadvantaged students.

Sunday's vote wasn't a surprise; the Senate, with its Democratic supermajority, did as expected. Now comes the harder lift: Will members of the House, scheduled to convene Wednesday, also vote to override Rauner?

If they do, the bill legislators passed May 31, and which Rauner has tried to rewrite via an amendatory veto, will become law. But a House override requires 71 votes, and the bill got only 60 yeses in the House in May. Even if all 67 Democrats now vote to override Rauner, they'll need a handful of his fellow Republicans to do the same.

Going into the weekend, we might have bet a nickel, but not a whole dime, that the House would vote to override. Several downstate school officials had complained publicly that the governor's rival plan his amended version of the bill would hurt their districts. But on Saturday, the Illinois State Board of Education finally issued calculations that may make an override a much tougher vote for some House members of both parties: Rauner's plan evidently would give most districts not named CPS more money than would the Democrats' Senate Bill 1.

Those new Rauner plan numbers popped up in Sunday's Senate debate. Distilling Republicans' points to their essence: Why should we send this much money to a Chicago district that already spends twice as much per pupil as our children's schools can spend? Why not uphold Rauner's veto and bring more money to our districts? His plan would give CPS millions more than it's getting now.

Expect House Republicans and Democrats outside Chicago to hear similar challenges from their constituents between now and Wednesday.

Chicago Tribune Staff

Illinois school funding: A tale of two plans

Illinois school funding: A tale of two plans (Chicago Tribune Staff)

Maybe House Speaker Michael Madigan already has persuaded enough Republicans to join Democrats in overriding Rauner. If so, game over.

But if Democrats are having trouble getting to 71, this an ideal time to summon an endangered species in Springfield: a compromise. What can Democrats offer Republicans, at this late date, to win some of their votes? To spare Senate Bill 1 from collapse?

Yes, this invites logistical hurdles: If the House changes Senate Bill 1 to attract Republican votes, the Senate would have to concur. A little more work for legislators, but they've kept a light schedule this year.

So Republicans are in a position to seek the sort of compromise-maker we advocated over the weekend: creating scholarships for low- and middle-income kids to attend public schools outside their district boundaries, or to attend private schools. Republicans also have spoken (including on Sunday) about reducing unfunded state mandates for schools, and about allowing districts to limit collective bargaining.

Democrats might not like those paths to compromise; teachers unions hate school choice almost as much as they'd hate any limit to collective bargaining. But Democrats also own a huge mess that many of them are frantic to address: the devastated finances of a CPS long mismanaged by, um, their fellow Democrats in Chicago's City Hall.

If Democrats refuse to compromise and let Senate Bill 1 die, they can wear that jacket. Or they can make a few sensible changes and attract enough Republicans to a funding plan that still gives CPS a heap of new loot.

Over to you, Speaker Madigan.

Join the discussion on Twitter @Trib_Ed_Boardand onFacebook.

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Continued here:
School funding: How new numbers could nudge Dems to compromise with Rauner's Republicans - Chicago Tribune

After years of Republican demands that any increase in the federal governments borrowing limit be paired with corresponding spending cuts, leaders in Congress appear to lack the votes to pass those cuts, even with total GOP control in Washington.

White House officials have called on Congress to forgo a political fight and increase the debt limit by the Sept. 29 deadline without attaching any controversial legislation. That decision means alienating conservatives who have demanded spending cuts, likely forcing leaders to turn to Democrats to deliver the votes necessary to avoid default. That option may be the safest way to avoid economic fallout from the United States failure to pay its bills. But it also risks angering conservatives who view the decision as an unacceptable violation of a core political promise to cut spending.

For months, conservatives have said that they are willing to negotiate modest spending cuts that could be considered alongside the inevitable debt-limit increase. But those talks never began in earnest. Instead, GOP lawmakers have been reluctant to identify any specific cuts they believe could get the support of a majority of Republicans.

Instead, many Republicans have speculated that House Speaker Paul D. Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) will work with Democrats on a package that could tie the debt limit to other bipartisan legislation, such as extending health-care coverage for low-income children. The idea has conservatives fuming.

Its sort of absurd to think that there are not more domestic discretionary cuts that couldnt happen, but there isnt the political will do to that, said Dan Holler, vice president of the conservative group Heritage Action.

Its also the type of scenario where conservatives typically lose out, Holler said. Conservatives should not be on the losing end in such a traumatic way with a Republican president. I think its a real test of this Congress.

Holler and other conservatives worry that the debt limit will be one of several conservative losses next month, when Congress faces a number of pressing deadlines, including the one Sept. 29 to fund the government and avoid a shutdown. Many Republicans privately admit that they expect GOP leaders will rely on Democrats to pass a spending bill, as well.

Republican leaders were forced to turn to Democrats to pass a $1.1 trillion spending deal to avert a government shutdown in May after conservatives refused to support it. At the time, leaders said they would spend the next several months developing a budget that would increase military spending, cut domestic costs and reduce the federal deficit. But none of those plans have been realized.

Instead, Congress was focused on repealing and replacing the Affordable Care Act. Republicans viewed repealing the ACA as a critical first step in a dramatic overhaul of government spending by making permanent steps to rein in entitlement programs like Medicaid. But throughout the process Republicans struggled to back the plan, which would have gutted Medicaid and cut spending on a number of widely used health-care programs.

Ultimately, those fears are what killed the legislation, representing the clearest sign yet that some Republicans were not prepared to follow through on promises to cut spending.

Steve Bell, a former staff director for the Senate Budget Committee, said federal spending on domestic programs has been constrained for years and many of the remaining expenditures are on popular programs that even many conservatives dont want to touch for fear of angering voters.

The deficit hawks have been routed, Bell said. They will not touch Medicare, Medicaid nor Social Security despite recent warnings from the trustees, despite the absolute undeniable facts. As long as they shy away from that, all the rest of that is bluster and messaging.

The White House has signaled that it doesnt want to risk the possibility of another standoff when it comes to increasing the debt limit. Last month, Treasury Secretary Steven Mnuchin told members of the House Financial Services Committee that the White House would not push for spending cuts and would support a clean debt-limit increase.

There should be very strict controls of spending money, but once weve agreed to spend the money, we should make sure that the government can pay for it, Mnuchin said.

There had been concerns that Mnuchin might be at odds with other factions within the White House who were privately pushing President Trump to demand cuts and flirting with the idea of selectively paying off debts beyond September. Mnuchin dismissed that talk, saying his view represented the entire White House.

Congressional leaders have repeatedly vowed to address the debt limit soon after they return from August recess. In the House, members have 12 legislative days to pass the increase and nearly half a dozen other must-pass priorities like the spending bills all deadlines Ryan has vowed to meet.

House Republicans are discussing with the Senate and the administration, and we will act before the deadline, said Ryan spokeswoman AshLee Strong.

Still, conservative members of the House Freedom Caucus say they want to work with Ryan on a plan to buck White House guidance and add modest spending cuts to a debt-limit vote.

Rep. Jim Jordan (R-Ohio) and others have called on Ryan to cancel a planned mid-September break to stay in Washington and work out a plan for spending cuts. Jordan said the House has barely touched on the debt limit and members havent had a chance to see if a deal can be reached.

I think there could be the votes there, but we havent explored that. We all went home, Jordan said in an interview. When you go home you dont discuss it, but then say you dont have the votes. You didnt even try.

That lack of effort has been a frustration for many conservatives who worry they will be alienated from the negotiations, despite promises that leaders would pursue a deeply conservative agenda this year. Rep. Thomas Garrett (R-Va.) said Republicans should be held accountable for promises they made while campaigning, including passing spending cuts, even when theyre difficult.

We didnt put a clean debt- limit increase in front of [President Barack] Obama. Why would we do it now? Garrett said in an interview. The I-dont-want-to-do-anything-unpopular disease affects both parties.

Read more at PowerPost

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Republicans may not have the votes for more spending cuts - Washington Post

Aug. 12, 2017, 7:11 p.m.

Republican elected officials, who increasingly have been putting distance between themselves and President Trump, jumped quickly away from him Saturday after his equivocating response to the violence in Charlottesville, Va.

Some, including Sen. Cory Gardner, who heads the Republican effort to elect senators in next year's midterm election, repudiated Trump directly, criticizing him for not condemning the white supremacist groups that marched in the Virginia college town Friday and Saturday.

Sen. Marco Rubio of Florida also critiqued Trump for not directly labeling as a terrorist attack Saturday's assault by a car, in which at least one person was killed and roughly 20 injured.

Others did not mention Trump directlybut did condemn the marchers, many of whom carried Nazi flags and similar regalia.

Sen. Orrin Hatch of Utah, the senior Republican in the Senate, remembered his brother, who died fighting in World War II.

Sen. Dean Heller of Nevada issued a statement in which "condemn[ed] the outrageous racism, hatred and violence. It's unacceptable & shameful. No room for it in this country."

Several Republican senators referred to the violence as a case of "domestic terrorism."

Sen. Ted Cruz of Texas, who has been a favorite of Republican conservatives, issued a statement in which he called on the Justice Department to "immediately investigate and prosecute today's grotesque act of domestic terrorism."

Sens. Joni Ernst of Iowa and Rob Portman of Ohio made similar references.

"White supremacy is a scourge," wrote House Speaker Paul D. Ryan (R-Wis.). "This hate and its terrorism must be confronted and defeated."

But the reaction was differentamong Republicans from the South, where a sizable percentage of GOP voters support keeping the sort of Confederate monuments that the white supremacist groups rallied in Charlottesville to protect.

For example, Sen. Luther Strange of Alabama, who faces a close primary election on Tuesday and has been fending off attacks from his right, stuck close to Trump.

Link:
Prominent Republicans distance themselves from Trump's tepid response to Charlottesville violence - Los Angeles Times

There's only about a 50-50 shot of getting tax reform done this year, Republican strategist Ron Christie predicted to CNBC on Friday.

"It's a very, very tough hill for Republicans to climb right now. We've seen the inability of House Republicans and their colleagues in the Senate to find consensus, to find a package to move forward to get to the president's desk," the former special assistant to President George W. Bush said in an interview with "Power Lunch."

"If you thought health care was complicated, I think tax reform is going to be an even more difficult burden for these guys to get over the finish line."

And the political infighting between President Donald Trump and Republicans certainly isn't helping matters, Republican Tony Fratto added.

Trump slammed Senate Majority Leader Mitch McConnell multiple times this week for what Trump calls his failure to follow through on the GOP agenda.

"Mitch, get back to work and put Repeal & Replace, Tax Reform & Cuts and a great Infrastructure Bill on my desk for signing," Trump wrote Thursday on Twitter.

The taunts led Republican senators to rally around McConnell on Friday.

Fratto, who was White House deputy press secretary under President George W. Bush, told "Power Lunch" he believes the only way to get tax reform done is to have the party unified.

"I have yet to meet a Republican in Washington who does not want to have significant tax reform done," he said. "They are unified on this. So trying to divide them is really, really destructive."

Jared Bernstein, former economic policy advisor to Vice President Joe Biden, thinks Trump's goal is to elevate Trump, not unify Republicans.

"He's far more interested in casting blame them in passing tax reform," Bernstein said.

Christie thinks Trump needs to work with McConnell on tax reform, not insult him over social media

"If we can't get anything done in the Congress, and we have the largest governing majority since 1929, it tells you perhaps that Republicans don't deserve the trust to govern."

CNBC's Jacob Pramuk contributed to this report.

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Republicans have 'tough hill to climb' on tax reform, GOP strategist says - CNBC