U.S. Senate Republicans put Biden on notice over debt ceiling

By David Morgan

WASHINGTON, Jan 27 (Reuters) – Two dozen U.S. Senate
Republicans warned Democratic President Joe Biden on Friday that
they would not support increasing the federal debt ceiling
without at least an equal amount of spending cuts to government
programs or structural reform.

In a Jan. 27 letter, lawmakers supported legislation to
require the U.S. Treasury to prioritize payments for the public
debt, Social Security, Medicare, veterans benefits and military
pay, if the government were to breach the current $31.4 trillion
borrowing limit in coming months.

The lawmakers represent nearly half of the Senate’s 49
Republicans. A debt ceiling increase would require support from
nine Republicans, 48 Democrats and three independents who caucus
with Democrats to meet the Senate’s 60-vote filibuster rule for
most legislation.

The one-page letter surfaced a day after Biden characterized
Republicans as a party of “chaos and catastrophe” while
criticizing their refusal to approve a debt ceiling increase
without spending cuts.

The White House, which has repeatedly voiced opposition to
debt ceiling negotiations, was not immediately available for
comment.

The federal government neared its congressionally imposed
$31.4 trillion borrowing limit on Jan. 19, and the Treasury
Department warned it may not be able to pay bills past early
June, at which point the world’s biggest economy could be at
risk for default.

“It is the policy of the Senate Republican conference that
any increase in the debt ceiling must be accompanied by cuts in
federal spending of an equal or greater amount as the debt
ceiling increase, or meaningful structural reform,” said the
letter led by staunch conservative Senator Mike Lee of Utah.

“We do not intend to vote for a debt-ceiling increase
without structural reforms,” added the lawmakers, who included
Senate Republican Conference Chairman John Barrasso.

Lawmakers often use the term structural reform to refer
to changes in Social Security and Medicare, respectively the
U.S. retirement and healthcare programs for the elderly.

But the senators cited debt prioritization legislation as an
acceptable reform. Such legislation, which hardline Republicans
in the House of Representatives support, would direct the
Treasury to make debt payments to avoid default and maintain
benefits for the elderly, veterans and the military. Other
federal programs could shut down.

The policy language used in the letter was part of a Senate
Republican rules package adopted during the last Congress,
according to a party conference spokesperson.

Brinkmanship could panic investors, potentially sending
markets slumping and shaking the global economy. In 2011, a
protracted debt-ceiling battle led to a downgrading of U.S.
creditworthiness and years of forced domestic and military
spending cuts.

On Tuesday, Senate Republican leader Mitch McConnell said
any solution to the debt ceiling debate would have to come from
talks between Biden and House of Representatives Speaker Kevin
McCarthy. Republicans control the House by a narrow margin,
while the Senate is led by Democrats.

Biden and McCarthy have agreed to meet but nothing has been
scheduled.

It was not clear whether the Senate Republicans notified
McCarthy about their letter ahead of time. Neither McCarthy’s
office nor Lee’s was immediately available for comment.

(Reporting by David Morgan; Editing by Josie Kao)