Every couple of years, Congress finds itself standing at the same precipice: If lawmakers don’t agree to suspend or raise the debt ceiling, the federal government risks defaulting on its loans, likely causing a massive economic crisis.
Lawmakers are now back at the brink, scrambling to pass a suspension to the debt limit — a legal cap to how much the country can borrow — even as they wrestle over an expansive infrastructure package and social spending bill. According to estimates from Treasury Secretary Janet Yellen, lawmakers have until October 18 to avoid a potential default.
For weeks, Republicans plainly refused to support legislation addressing the debt ceiling because they want to paint Democrats as big spenders who’ve racked up the debt — and as hypocrites who are willing to pass a larger social spending bill on party lines, but unwilling to raise the ceiling the same way.
“Republicans’ position is simple. We have no list of demands,” Senate Minority Leader Mitch McConnell wrote to President Joe Biden on Monday. “For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well.”
But on Wednesday, McConnell said that Republicans would not block a short-term increase of the debt limit until December, as long as Democrats met certain conditions.
Republicans’ position on the debt ceiling is the latest attempt to use it for political leverage. Debt has been accrued under both Democratic and Republican lawmakers, and both political parties have used looming debt crises to argue that the other side is being fiscally irresponsible. In more recent years, the GOP, in particular, has used such disagreements to extract policy concessions. In the current fight, Republicans’ willingness until now to oppose a suspension without any requests was more novel, and a clear indication that the GOP primarily hoped to gain ammunition it could use against Democrats in the future.
“This is a very dangerous game of chicken we’re playing,” says Laura Blessing, a senior fellow at Georgetown University’s Government Affairs Institute.
It seems as though Republican leaders have now swerved for the time being, wanting to avoid economic collapse. If lawmakers move forward with a short-term increase, however, it’s likely they’ll find themselves in the same stalemate in a few months.
Raising or suspending the debt limit, much like approving government appropriations, is a routine issue that Congress is tasked with. As Vox’s Dylan Matthews has explained, the United States is unique in having a debt limit that lawmakers need to suspend or raise every few years; since the 1960s, Congress has raised or suspended the debt limit roughly 80 times, according to the Associated Press.
The last time lawmakers suspended the debt limit was in 2019, when both the House and Senate did so on a bipartisan basis.
This time, however, Republicans had refused to allow even a short-term measure to move forward until this week. They argued that it wasn’t because they didn’t want one, but because they feel that Democrats, who control both houses of Congress and the White House, should be responsible for approving it on their own.
“The debt ceiling will be raised, as it always should be. But it will be raised by the Democrats,” McConnell has said. (In the past, if a party held both the White House and Senate, data shows that its members have made up the bulk of the votes for such efforts, political scientist Sarah Binder explained in the Washington Post. It was less common, though, for the minority party to filibuster such attempts.)
Republicans’ refusal to act for weeks was largely political: Republicans broadly want to make sure that Democrats get the blame for accepting new debt while also trying to pass a large social spending package along party lines. The debt that would be addressed includes spending that took place during the Trump administration, like the $2.2 trillion CARES Act and more than $1.5 trillion in tax cuts.
Sen. Rick Scott (R-FL), the head of Republicans’ Senate campaign arm, recently acknowledged the party’s political motives. “Oh, you better believe it,” Scott told NBC News when asked about whether he’d be using Democratic votes in favor of raising the debt limit to attack them in campaign ads during the 2022 midterms.
So far, Republicans have already filibustered, or blocked, an attempt by Democrats to approve a suspension to the debt ceiling in a short-term spending bill that would have also funded the government through mid-December. This week, they’re poised to do so again when lawmakers consider a standalone suspension into next year. When filibustered, legislation requires 60 votes to pass, meaning the 50-person Democratic caucus would need to find 10 Republican lawmakers to join them.
As a concession, McConnell has promised that Republicans won’t filibuster a short-term debt limit increase into December and he suggested that the party wouldn’t slow attempts to approve an increase via budget reconciliation. Thus far, Democrats have been reluctant to use budget reconciliation because of how long and convoluted the process could be. Taking this approach could require proposing a specific increase to the debt ceiling, which Democrats wanted to avoid as well.
Political threats about the debt ceiling have been around for a long time.
In the 1950s, Republican President Dwight D. Eisenhower navigated standoffs with Democratic members of Congress about increasing the debt ceiling. At the time, Senate Democrats argued that the federal government should focus on reducing its expenditures rather than raising the debt cap. By withholding their support for a higher ceiling, lawmakers forced the administration to consider serious spending cuts.
Since then, the debt ceiling has been weaponized by members of both parties: Because a suspension or increase is a must-pass measure, lawmakers have tried to push for their demands to be addressed in exchange for votes. And many have opted to vote against debt increases as a way to portray the opposing party as involved in irresponsible spending. Republicans, for instance, like to point out that Biden was among the senators who opposed raising the debt limit in 2006 when Republicans had congressional control. (Democrats did not filibuster the final vote on the debt limit that year, however.)
“My vote against the debt limit increase cannot change the fact that we have incurred this debt already, and will no doubt incur more,” Biden said that year. “It is a statement that I refuse to be associated with the policies that brought us to this point.”
A recent fight in 2011 was a turning point; some lawmakers actually seemed open to a possible default.
That year, Republicans balked on suspending the debt limit and refused to do so until President Barack Obama agreed to key spending cuts, concessions they ultimately secured. The US got so close to default that year that it led Standard and Poor’s to downgrade the country’s credit rating.
Political experts note that this disagreement marked one of the first times it seemed like lawmakers were actually willing to go over the edge, despite the economic chaos that could ensue.
“I’d definitely say 2011 was a step forward in how aggressively the debt ceiling was weaponized to secure partisan policy goals,” said Josh Bivens, the director of research at the Economic Policy Institute. “I’d say 1995 was also important; [House Speaker Newt] Gingrich threatened this but didn’t take it as far as the GOP did in 2011.”
In the years since, lawmakers, specifically Republicans, have become more aggressive in holding debt ceiling increases hostage in order to either elicit a policy demand or make a point. In 2013, Republicans did not support ending debate on the debt ceiling, a practice that had been uncommon beforehand. The willingness to filibuster the debt ceiling, experts say, is a sign of how partisan many legislative fights — including this one — have become.
“We’ve seen a dramatic increase in the use of a filibuster ... you need 60 votes for everything,” says Shai Akabas, the director of economic policy at the Bipartisan Policy Center. “It’s not unique to the debt limit.”
Because majorities in Congress have narrowed in recent years for both parties, experts note that there’s greater incentive to stymying the other party’s efforts, since it could offer an advantage in the upcoming elections — and allow the minority to retake control.
“It’s much more common to exert all procedural options to something like appropriations or the debt ceiling. There’s much more brinksmanship. It’s expected that every September 30, we’ll be approaching a shutdown. It’s expected that every October, we could approach a default,” says Josh Huder, a senior fellow at Georgetown’s Government Affairs Institute. “It’s using all of the legislative tools to put the majority party in a bad position, for electoral gain.”
The US government doesn’t have to work this way.
Congress could pass legislation doing away with the debt ceiling, and the president has options to ignore it as well, though they’d likely prompt legal challenges. As Vox’s Dylan Matthews has reported, options range from the president invoking the 14th Amendment and ignoring the debt limit to Congress approving an increase to the debt cap that’s so high it basically nullifies the ceiling.
Abolishing the debt limit altogether would prevent either party from using this process as political leverage and eliminate the risk of the US defaulting on its obligations. Doing so would greatly reduce the uncertainty that comes around every time there’s a deadline like this and prevent significant market volatility that results.
“There are zero downsides to getting rid of the debt ceiling. It is utterly meaningless as a policy guide or institution; it is good only for grid-locking government. And, in the modern age, gridlock is an enormous problem, given the huge pressing needs policymakers should be addressing,” says Bivens, of the Economic Policy Institute.
Others note that it could take away an opportunity for Congress to debate fiscal policy. But many feel like that’s a moot point, given debt ceiling standoffs are rarely about any specific spending anymore, but rather about weakening the electoral advantage of the party in power.
“The debt limit was one of those stoppage points that has encouraged and allowed for conversations over how to address health care costs, tax policy, how to address fiscal reforms,” says Marc Goldwein, policy director at the Committee for a Responsible Federal Budget. “We haven’t seen that in any of the recent increases. An argument against repealing it is you lose that stoppage point.”
Rather than do away with the debt limit altogether, some experts have proposed options like giving the president the ability to propose a suspension that Congress would need to override if it disagreed, making it tougher for legislators to jam up that process. A proposal that Akabas of the Bipartisan Policy Center supports would pair this proposal with a mandatory debate on fiscal policy to force Congress to confront spending issues.
Whether there’s enough political will to make any of these changes is heavily in doubt; both parties have used this must-pass legislation to make political statements when it suits them.
“I’m not sure there’s all that much desire to take it off the table in terms of members of the minority losing this political thing they have to fight with,” University of Texas Austin government professor Alison Craig told Vox.
Instead, it seems as though lawmakers are comfortable getting right up to the brink — and running the risk of a default again and again.
source https://www.vox.com/2021/10/6/22691910/debt-ceiling-congress
Post a Comment