Are We Heading to a Debt Default Filibuster Carve-out?

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October 5, 2021 10:10 a.m.

I’m starting to think this latest bout of debt limit hostage taking will end with a filibuster carve out. On its face that seems highly improbable given the resistance through the year from Manchin and Sinema. And I think Manchin has said no way to this specifically. So it seems really improbable. But we’re down to very improbable outcomes and this is starting to seem like the least improbable one.

Let’s walk through the scenarios.

Start with the obvious parts. Republicans won’t agree to lift the debt ceiling or stop filibustering Democrats’ efforts to do it on their own. That’s obvious. Republicans are insisting that it gets put into the reconciliation bill because this will at least making reconciliation negotiations harder and just generally create chaos. But it’s starting to seem to me like Democrats simply won’t do this.

Now will they flinch at the last minute because Republicans don’t care and are willing to torch the country? In the abstract I think definitely. But here’s the catch: the reconciliation process isn’t just a vote you can call. It’s a pretty lengthy parliamentary process with several steps, so called ‘vote-o-ramas’ and more. I can never figure out from Capitol Hill types what the absolute fastest you can do these things versus how long it normally takes. But there’s a limit past which you simply don’t have enough time. And I think that limit is in multiple days at the absolute minimum. A week is a good estimate. (The Republicans looking to leverage this for their presidential aspirations – Cruz, Hawley, et al. – have promised to drag it out as much as possible.) And it really seems to me that Democrats are not going to start that process in the required time.

I’ve seen some estimates that its already too late to get it done by the 18th. But I assume those are not figuring all the shortcuts and late nights that could be taken. The relevant point is that that window is already closing.

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So now you have a scenario in which you’re a few days out from the true debt limit expiration. There’s not enough time to go through the multistep process of doing it through reconciliation which requires only 50 votes. Now you have a situation in which the Democrats are not able to flinch. They have no flinch option. Republicans won’t flinch because they’re legislative terrorists. So what happens?

You can say Manchin insists it has to be done through reconciliation. But if the assumptions in my scenario are accurate – and I think they are – that’s no longer possible. So that demand disappears. Does he plead with Republicans? Probably. But that won’t work. Does he allow the country to default? I can’t believe that he or any other Democrat, including Kyrsten Sinema, allow the country to default – essentially declare bankruptcy – rather than change the Senate rules to say that the filibuster no longer applies to the debt ceiling. That rule change can happen at the drop of a hat. All you need is the majority to change the rules. That’s 50 votes plus the Vice President.

Now the wobbly part of my set of assumptions is just how long it takes to push something through the reconciliation process. I think it’s normally like week or two long process even once you’ve got all the negotiating done. I’ve spoken to a few hill veterans and about a week seems like the realistic minimum. We’re a couple weeks out from the notional deadline now.

Again, I don’t think the United States is going to default on its debt obligations. There’s a very good argument that that actually violates the federal constitution. But I don’t think the Congress will let that happen. But I don’t see another way to prevent it.

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