How Democrats Could Handle The Debt Limit On Their Own

If Republicans won’t back down from their refusal to support legislation allowing the federal government to pay its bills, Democrats may have to deal with it on their own.

But even if Democrats concede to Republicans and move to raise the debt ceiling themselves, they can’t just snap their fingers to make it happen — and it may already be too late. 

One option ― the one Republicans have urged all along ― would be to include a provision in Democrats’ upcoming $3.5 trillion budget bill to extend the government’s borrowing authority beyond its current statutory limit (which is otherwise known as the debt ceiling). 

But Democrats have insisted that the debt limit be dealt with in a bipartisan manner, since Republicans are responsible for plenty of debt themselves, and omitted a debt ceiling provision from the initial budget resolution the House and Senate approved in August. 

To add the debt ceiling increase to the $3.5 trillion “Build Back Better” bill, for which they are using the budget reconciliation process, Democrats would have to amend the initial resolution, which would then trigger another lengthy series of amendment votes in the Senate known as a “vote-a-rama.” The whole process would be messy and could take weeks. 

“The problem is, if you want to [address the debt limit] in reconciliation, you gotta have two more vote-a-ramas,” Sen. Angus King (I-Maine) told reporters this week. 

Republicans countered by noting that Democrats had months to deal with the debt limit, arguing that any procedural hurdles shouldn’t stop them from getting to work on avoiding a fiscal calamity as quickly as possible. 

“They need to get busy,” Sen. John Cornyn (R-Texas) said. 

But the obstacles Democrats face aren’t only procedural. Already, moderate members like Sen. Joe Manchin (W.Va.) and Sen. Kyrsten Sinema (Ariz.) are throwing up roadblocks to the Build Back Better legislation over its impact on the deficit. Attaching a debt limit increase into the bill could give those Democrats more ammo in their efforts to decrease its size.

A purely partisan vote on the debt ceiling could also have political ramifications in next year’s midterm elections. The handful of Democratic senators facing competitive fights next year ― like Maggie Hassan in New Hampshire and Mark Kelly in Arizona ― would likely face Republican attacks over a Democrat-only vote to lift the debt ceiling. A bipartisan vote on the debt ceiling, on the other hand, would give nervous Democrats political cover. 

“Democrats must be worried about it or otherwise they’d be doing it on their own,” Sen. Rick Scott (R-Fla.), the chairman of the National Republican Senatorial Committee, said in a press conference on Wednesday. 

It’s not clear how quickly Democrats could come to an agreement on their big legislation even if they wanted to include the debt limit, which is a problem because the clock is ticking: Treasury Secretary Janet Yellen has said the government will run out of cash and be unable to pay bills starting sometime in October, potentially roiling financial markets and delaying benefits in programs like Social Security.  

House Budget Committee chairman John Yarmuth (D-Ky.) said Democratic staff attorneys are exploring the options for raising the debt limit in reconciliation, but that there might not be enough time, since they would either have to amend the original budget resolution or start a new one. 

In any case, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.) have steadfastly insisted the debt limit won’t be part of their budget bill. 

“I’ve rarely heard the speaker and leadership more adamant about anything other than that they’re not going to do this through reconciliation,” Yarmuth told HuffPost. 

Another option, which lawmakers used in 2011 and 2013, would be for Congress to give the White House the power to raise the limit unilaterally, with the increase subject to congressional resolutions of disapproval, which would fail but allow lawmakers to claim they’d opposed the increase.  

Back then, Republicans were demanding major spending cuts. This time, they’re just being uncooperative. They have no demands, other than putting pressure on Democrats to narrow their reconciliation package or abandon it outright.

The federal debt ceiling is a legal limit on the amount of money the government can borrow to pay for operations. Raising or suspending the limit doesn’t actually allow for new spending, it just lets the Treasury Department borrow money to cover spending lawmakers already approved. Congress has modified the limit nearly 100 times since the 1950s, including three times during the Donald Trump administration, when Democrats did not use the limit for political leverage the way Republicans did during Barack Obama’s presidency.

Senate Republicans announced in a letter last month that they wouldn’t support a debt limit extension under any circumstances, insisting that default be avoided by Democrats handling the matter themselves.  

But Democrats aren’t taking the Republican suggestion and are pushing the GOP to back down. To that end, the House attached a debt limit increase to a government funding bill that passed on Tuesday. The Senate is expected to vote on the measure early next week, where it is all but certain to languish due to a Republican filibuster. 

What no lawmakers are discussing yet, however, is what happens after it fails. 

“The annual wrangle over [how to lift the debt ceiling] makes no sense,” Sen. Elizabeth Warren (D-Mass.) said Wednesday. “It’s time for us to acknowledge that the real work is done when Congress votes to spend the money and there should be no question that having voted to spend the money that the U.S. would then follow through on its obligations.”

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