GOP works on vets’ pension angle

House leaders see linking cuts’ reversal to raising debt limit

WASHINGTON - House Republican leaders were pursuing a plan Monday to reverse a recently passed cut to military pensions as the price for increasing the government’s borrowing cap, but it received a rocky reception from skeptical conservatives.

GOP leaders briefed rank-and-file lawmakers at a meeting in the Capitol on Monday evening in hopes of passing it Wednesday before departing Washington for a week-long vacation. It’s unclear whether the vote would still go forward after it was rejected by many conservatives.

“Right now we’ve got a debt-ceiling bill that increases spending, which is diametrically 180 degrees opposite of what we were battling over just two years ago - where the question was how much in spending cuts we were going to get,” said Rep. Mo Brooks, R-Ala.

It’s also not clear whether the plan will fly with Democrats. Their votes would be needed to help pass the measure because some Republicans refuse to vote to raise the debt ceiling under any circumstances. A spokesman for House Minority Leader Nancy Pelosi, D-Calif., said Democrats will continue to insist any debt-limit legislation omit add-ons, even bipartisan proposals such as repealing military pension cuts.

White House spokesman Jay Carney sidestepped a question about whether President Barack Obama would sign debt-ceiling legislation that included restoration of full benefits for military retirees, reiterating the White House position that Obama would not negotiate on raising the borrowing limit.

“I’m not going to get into a ‘what if this were in the bill or that were in the bill,’” Carney said. “Our position has not changed. It hasn’t changed for a long, long time. We’re not negotiating over Congress’ responsibility to pay its bills.”

Carney added that “we’re not going to pay ransom on behalf of the American people to Republicans in Congress so that Republicans in Congress fulfill their constitutional responsibilities.”

The cuts to cost-of-living pension increases for military retirees younger than 62 were part of December’s budget agreement, backed by House Budget Committee Chairman Paul Ryan, R-Wis.

The reduction has sparked an uproar among advocates for veterans, and lawmakers in both parties want to repeal it.

The 10-year, $6 billion cost of canceling the cut would be borne by extending for an additional year a 2 percentage point cut to Medicare reimbursements to doctors and hospitals, as well as cuts to a handful of other benefit programs. Those cuts would now extend through 2024.

Time is running out for lawmakers to act to lift the debt limit. Treasury Secretary Jacob Lew told lawmakers last week that the Treasury will exhaust by Feb. 27 its ability to employ accounting maneuvers to borrow to pay its bills.

Lew told congressional leaders Monday that he had begun tapping two large government-worker retirement funds to clear room under the debt limit. The action involving the Civil Service Retirement and Disability Fund will provide $50 billion to $75 billion in additional borrowing room while tapping the Government Securities Investment Fund will provide about $175 billion, Lew estimated.

Lew announced he would suspend payments to the two pension funds and would also draw down investments made in the funds. Previous Treasury secretaries have also employed the bookkeeping maneuver. Once Congress approves a new debt ceiling, the Treasury makes the funds whole by replacing the withdrawn money and lost interest earnings.

Lawmakers temporarily suspended the borrowing limit in October in an agreement that ended a government shutdown. With an extension of borrowing authority needed again, the GOP debt-ceiling plan is likely to employ the same approach and suspend the limit through early next year.

Raising the limit is needed so the government, which ran a $680 billion deficit last year, can borrow enough to pay its bills, including Social Security benefits, interest payments on the accumulated debt and government salaries.

Obama gave in to GOP demands in 2011 to pair a $2.1 trillion increase in the debt limit with an equal amount in spending cuts, mostly to the Pentagon and domestic agency operating budgets. He has since refused to negotiate over the debt ceiling.

Republicans last year gave Obama two debt increases with only modest add-ons, such as a provision to force the Senate to pass a federal budget.

Front Section, Pages 4 on 02/11/2014

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