Lawmakers’ game of chicken with the debt limit was always risky. Now it’s getting downright dangerous.
Democrats have set up another vote Wednesday on a bill that would suspend the federal debt ceiling until December 2022, but Republicans said they intend to block the measure, as they have done previously.
Senate Majority Leader Chuck Schumer (D-NY) on Tuesday pleaded with Republicans to change their plans. “Tomorrow's vote is simply a cloture vote. It is not a vote to raise the debt ceiling,” he said. “It's rather a procedural step to let Democrats raise the debt ceiling on our own, just as Republicans have called for.”
But Democrats would need 10 Republicans to join them on the procedural vote, and there’s no indication that Republicans will do so.
Sen. Roy Blunt (R-MO) said 40 or 45 Republicans are in favor of allowing the bill to come to a vote, as long as they don’t have to actually support the bill, but five or so Republicans are refusing to compromise. “It has to be everyone,” Blunt said.
Sen. Angus King of Maine, an independent who caucuses with Democrats, slammed Republicans for failing to even debate the matter. “There’s no bargaining,” he said. “They’re just stamping their feet and saying no.”
Reconciliation alternative: Democrats can raise the debt ceiling on their own through the reconciliation process, as McConnell is pushing them to do. But they are resisting doing so — and they’re running out of time to start the complicated process.
Sen. Joe Manchin (D-WV) vowed Monday that Democrats will not allow the U.S. to default. Although he wasn’t entirely clear about the process he prefers for doing so, he invoked some of the procedures that would be involved in reconciliation. “We can prevent default, we really can prevent it,” he said. “And there's a way to do that, and there's a couple other tools we have that we can use. Takes a little bit of time, a little bit of — it's gonna be a little bit of pain, long vote-a-ramas, this and that — do what you have to do. But we cannot — and I want people to know — we will not let this country default.”
But after a meeting of Democratic lawmakers Tuesday, at least one senator said reconciliation is not an option. “We're not doing it on reconciliation,” Sen. Tim Kaine (D-VA) told reporters.
Schumer also downplayed the use of reconciliation. “We do not have the luxury of using a drawn-out, convoluted and risky process,” he said. “We could prevent a catastrophic default with a simple majority vote tomorrow if Republicans would just get out of the damn way.
Republican strategy: One reason McConnell is insisting that Democrats use the reconciliation process to raise the debt limit is that it would eat up limited legislative time on the floor of the Senate, further delaying work on President Joe Biden’s agenda.
“There's no reason for us to help facilitate bad policy that we disagree with, and so they have to eat up little floor time passing the debt ceiling through reconciliation that's fine with me," Sen. John Cornyn (R-TX) said Monday.
According to Punchbowl News, McConnell’s strategy is to use the debt ceiling crisis to paint Democrats as fiscally irresponsible. “Even after Republicans spent like drunken sailors during the Trump years, they’re eager to have the political conversation turn back toward the national debt and deficits -- never mind the hypocrisy,” Punchbowl said Tuesday. “Republicans look at the $3.5 trillion reconciliation package proposed by President Joe Biden on top of the $1.9 trillion American Rescue Plan, coupled with rising inflation, and believe they can paint Democrats as reckless and incapable of leading the country during these uncertain times.”
Biden blitz: Accusing Republicans of being “hypocritical, dangerous and disgraceful,” President Joe Biden on Monday kicked off public relations effort to blame the GOP for the standoff over the debt ceiling. The White House will rely on surrogates to spread their message, Politico’s Christopher Cadelago reports, which will include the charge that Republicans are now refusing to take responsibility for the trillions of dollars in debt that were created under former President Donald Trump.
More warnings: Treasury Secretary Janet Yellen told CNBC Tuesday that the U.S. economy would likely tumble into a recession if Congress fails to raise or suspend the debt ceiling.
“I do regard October 18 as a deadline,” she said, referring to the date the Treasury has estimated that it will run out of funds. “It would be catastrophic to not pay the government’s bills, for us to be in a position where we lacked the resources to pay the government’s bills.”
Speaking at a House Financial Services Committee hearing, Securities and Exchange Commission Chair Gary Gensler told lawmakers that a default could unleash significant volatility in U.S. capital markets, which rely on Treasury securities to function smoothly.
“I think we'd be in very uncharted waters,” Gensler said. “Though we don't know for sure, we'd have significant volatility in the markets, and we'd see some breakages in the system.”
Schumer echoed the dire tone on the floor of the Senate Tuesday. “It's not too late, but it's getting dangerously close,” he said as he urged his fellow lawmakers to act quickly on the matter.