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(Adds comments from Freedom Caucus, paras 9-11)
By Ayesha Rascoe
WASHINGTON, June 15 (Reuters) - The White House has not settled on a plan for working with Congress to raise the federal debt limit, U.S. budget director Mick Mulvaney said on Thursday, even as the deadline loomed for the government to increase its borrowing authority.
The Trump administration has urged Congress to increase the debt limit before it heads out for its August recess, but Mulvaney said officials had not decided what form the legislation should take.
"There are various thoughts about how to get something passed, but I don't think we've settled on how to move forward yet," Mulvaney told reporters at a briefing. "Will it be a clean debt ceiling vote? Will it be a debt ceiling vote with some type of reforms attached to it? I don't think we've settled on that."
The U.S. government has a legal limit on how much it can borrow, currently set at about $19.8 trillion. The limit can be increased only by a vote of Congress.
The White House has sent mixed signals on how the debt limit should be handled by lawmakers.
Treasury Secretary Steven Mnuchin asked lawmakers to pass a bill without any measures attached to it. However, Mulvaney, a conservative Republican, was known to favor using the debt limit as leverage to get spending cuts during his time in Congress, before he was tapped to be budget director.
He downplayed any disagreements within the administration, saying it was not unusual for a Treasury secretary and a budget director to have different views on the debt limit.
"It is not a source of division right now in the White House, nor is it a source of division in the party," he said.
But on Capitol Hill, the House Freedom Caucus, an influential group of about three dozen conservative Republican lawmakers to which Mulvaney once belonged, has called for any increase in the debt ceiling to be linked to reforms that cut unnecessary spending and work toward balancing the U.S. budget.
Freedom Caucus leader Mark Meadows said on Thursday he favored such a conditional raising of the debt ceiling by about $1.5 trillion, which he believes may be somewhat less than what the Trump administration wants.
"There’s a number of us who are talking about a $1.5 trillion range, as long as there are some structural reforms, some other things that could go along with that," Meadows said in the House Speaker’s Lobby.
Republicans control the White House and both chambers of Congress. Generally, conservative Republicans have attempted to use the debt limit to push fiscal reform, while Democrats and moderate Republicans have opposed such ultimatums.
Lower tax revenues this year have forced the U.S. Treasury to borrow more money to cover the federal budget deficit, which may lead to the government hitting its legal debt limit sooner than expected, experts say.
Mnuchin said Monday that the government would be able to pay its bills at least through early September. (Additional reporting by Susan Cornwell; editing by Chizu Nomiyama and Dan Grebler)