The national debt is the Republicans' problem now

Never mix up the debt and deficit again
Never mix up the debt and deficit again

Republicans have not been shy about expressing outrage over the country's debt during the Obama years. Their demands for spending restraint even created a budget standoff in 2011 that put the country at risk of default.

But that take-no-prisoners attitude will be a little tougher to swing now that Republicans will control both the White House and Congress next year. The debt will now be theirs to manage.

So how will they handle it? The party that calls for balanced budgets, smaller government and spending cuts will have ample opportunity to show just how faithful they'll be to their own rhetoric as they adapt to President-elect Donald Trump and his very pricey policy proposals.

Get rid of Obamacare

It's not clear yet whether Republicans will repeal the Affordable Care Act first and replace it later or do both at the same time.

If they do repeal separately, no one will get a true picture of the budget impact. Eliminating provisions like federal insurance subsidies can make repeal look like a deficit reducer. But the question is how much will Republicans' replacement plan cost?

"It's best to do [repeal and replace] together so people understand the tradeoffs," said Robert Bixby, executive director of the Concord Coalition, a deficit watchdog group.

Draft a budget

The budget process kicks off in February when the president releases his budget proposal laying out his priorities for the next fiscal year.

Trump has said he wants big tax cuts and more defense and infrastructure spending, among other things. His fiscal plans are estimated to add $5.3 trillion to the debt over 10 years, according to the Committee for a Responsible Federal Budget. That would push debt as a share of GDP to 105% by 2026, well above 86%, which is where it would be in a decade if no policies were changed.

Republican lawmakers will have to weigh Trump's priorities with their desire to reduce deficits and reform Social Security and Medicare, benefits from which Trump has said repeatedly he doesn't want to cut.

Deal with the debt ceiling

Congress will need to raise -- or at least suspend -- the federal debt limit.

The so-called debt ceiling is a cap set by Congress on how much the federal government may have in outstanding debt. It does not give lawmakers a 'license to spend more' as some suggest. Rather, it lets Treasury borrow the money it needs to pay all U.S. bills and other legal obligations that have been approved by lawmakers from both parties over the years.

The latest suspension ends on March 15. But the U.S. Treasury may be able to buy lawmakers a few more months to deal with the issue by using accounting maneuvers that let it continue to pay bills without pushing past the country's legal borrowing limit.

As many conservatives did during the debt ceiling crisis of 2011, some Republicans today still say they won't vote to raise the debt ceiling unless it's paired with budget restraints.

But are they likely to go against their own party leaders or a Republican president if they don't get what they want? Stay tuned.

Or will Republicans simply avoid voting outright on a debt ceiling increase and opt to suspend it again? Suspensions let the U.S. Treasury borrow what it needs to pay bills. When the suspension ends the debt limit resets to the old cap plus whatever Treasury borrowed during the suspension period.

Debate tax reform

Republicans have promised tax cuts as a centerpiece of tax reform.

Trump has modified his tax cut plan to reduce its cost -- now estimated at around $5 trillion. House Republicans' tax reform plan costs about half that.

Both are big hits to the budget. Senate tax writers have yet to put forth their own plan.

Related: 'No absolute tax cut' for the rich, says Trump's Treasury pick

The problem when it comes to fiscal restraint: "Republicans have boxed themselves into a position where they can't say 'No, we can't cut taxes too much because the deficit will go up,'" Bixby said.

So how will they pay for those tax cuts? And if they choose not to, how much harder will they hit other parts of the budget when they decide debt levels are unacceptably high?

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