U.S. won’t default on debt, House Speaker Ryan says

WASHINGTON – House Speaker Paul Ryan is assuring investors that Congress will meet a new deadline to increase the government’s borrowing authority and avert an economy-quaking default on U.S. obligations.

Ryan said Thursday that “the debt ceiling issue will get resolved.” He spoke a day after Treasury Secretary Steven Mnuchin warned lawmakers that Congress needs to vote to increase the almost $20 trillion borrowing cap before taking its annual August vacation.

It had been previously assumed that lawmakers wouldn’t have to vote on the debt limit until sometime this fall.

“The timing is what I think is the newsworthy thing here,” Ryan said. “Receipts aren’t quite what people thought they were and that’s why Secretary Mnuchin is moving the timetable up. So we’re looking at that new timetable.”

Conservatives are pressing to include spending cuts in any debt legislation as a condition of voting for a debt hike. Former Speaker John Boehner, R-Ohio, succeeded in imposing spending cuts upon former President Barack Obama in a major debt limit battle in 2011, but Obama rejected the idea in subsequent debt deals – which cleared Congress with bipartisan support.

Mnuchin, a former Goldman Sachs executive, is following in the footsteps of previous Treasury heads by requesting that the debt measure move as quickly as possible, with its path kept free of controversial add-ons.

But Mnuchin’s request for a “clean” debt bill has been rejected by, among other GOP factions, the hard-right Freedom Caucus.

“We demand that any increase of the debt ceiling be paired with policy that addresses Washington’s unsustainable spending,” the Freedom Caucus said in a statement on Wednesday.

“A clean debt ceiling is not something that’s been met with broad approval by the (GOP) conference in the past,” said veteran GOP Rep. Greg Walden of Oregon. “I have no reason to believe that sentiment would change here.”

But such cuts would likely drive away potential Democratic support, and many if not most lawmakers believe Republicans simply lack the ability to pass the politically difficult measure without help from Democrats. Ryan on Thursday didn’t address the idea of adding cuts demanded by conservatives.

“They’re going to have to come hat in hand to us, anyways,” said the senior Budget Committee Democrat, Rep. John Yarmouth of Kentucky. “I can’t imagine any scenario in which they don’t have to have Democratic votes.”