Pelosi: No debt limit increase to reward rich with tax cuts

Top House Democrat Nancy Pelosi says that GOP leaders shouldn't take for granted that Democrats will vote to increase the government's borrowing cap.

Pelosi told reporters Friday that she has no "intention of supporting lifting the debt ceiling to enable the Republicans to give another tax break to the wealthy."

Her remarks came as the Trump administration and congressional Republicans are grappling to develop a strategy for a debt limit measure that could advance next month. Treasury Secretary Steven Mnuchin is pressing for a debt limit measure that's free of other legislation that could interfere with its passage, but other Republicans, such as White House budget director Mick Mulvaney and House conservative groups such as the Freedom Caucus, want to use the measure as an opportunity to advance spending cuts.

"I think it's fair to say that we've not settled on a final policy for the administration," Mulvaney said in an interview Friday with The New York Times that was webcast on Facebook.

"We're not there to lift the debt ceiling to enable Republicans to throw a few crumbs to the middle class while there's a big tax break to the high end," Pelosi said, adding that she was in agreement with top Senate Democrat Chuck Schumer.

An aide to Schumer said the New York Democrat had in fact proposed to Pelosi the idea to condition voting for the debt ceiling on keeping any tax overhaul deficit neutral, but Schumer still needs to discuss it with fellow Senate Democrats.

During former President Barack Obama's recent tenure, Pelosi supported debt increases that were "clean" of add-ons by Republicans. Republicans in 2011 managed to coerce Obama into accepting about $2 trillion in deficit cuts as a condition for increasing the debt limit — though lawmakers have since rolled back some of those cuts.

It's generally assumed that Republicans and the Trump administration will have to turn to Democrats for votes to increase the government's almost $20 trillion debt cap — and avert a catastrophic default on U.S. obligations.

Mulvaney on Friday vowed that the U.S. won't default on its debt obligations to investors even if Congress fails to raise the borrowing cap on time, but as he did as a lawmaker, Mulvaney seemed to downplay the consequences of being late on other payments. "That's not a desirable outcome," Mulvaney said. "The one thing you can say about the debt ceiling discussion is that there is absolutely no way that the U.S. will ever default on its debt. We are not going to do that. You can take that off the table."

Mnuchin warned lawmakers last month that they should increase the government's debt limit before going on their annual August recess. Other analysts such as the Bipartisan Policy Center, a Washington think tank, say the due date for a debt extension is likely sometime this fall.