As a consequence of Republicans’ highly irresponsible game of chicken with the debt ceiling, it’s looking increasingly like Democrats will have to raise the debt limit on their own through reconciliation.
A bill temporarily suspending the debt ceiling and keeping the government funded will come to the floor Monday, but Republican senators have gleefully previewed their coming filibuster. The bill will almost certainly fail.
That leaves it to Democrats to be the only party responsible enough not to risk global economic catastrophe in favor of causing the opposing party a little political pain. And they won’t have long to do it. While it’s hard to pin down exactly when the Treasury will exhaust its “extraordinary measures” to keep paying our bills, experts estimate it will likely happen sometime in October.
Much of the way forward is uncharted, punctuated with the jagged rocks of bad Republican actors, procedural hurdles and an unelected parliamentarian-turned-king of the Senate.
The Procedural And The Political
The fundamental question — can Democrats raise the debt ceiling through reconciliation? — has separate procedural and political answers. Procedurally, experts gave TPM a resounding yes.
It comes down to the Congressional Budget Act, the law that created reconciliation. It determines that in one year, there can be up to three different reconciliation bills: one on taxes, one on spending and one on the debt limit. So Democrats could do their x-trillion dollar “infrastructure” bill and a separate one raising the debt limit.
This is distinctly different from Senate Majority Leader Chuck Schumer’s (D-NY) attempt to eke out multiple reconciliation vehicles per year earlier in 2021.
“The problem with Schumer’s request earlier in the year is that he wanted to do spending on multiple reconciliation bills for the same year,” David Super, a professor at Georgetown Law School, told TPM. “That you can’t do.”
Similarly, if Democrats were to raise the debt ceiling through reconciliation, they couldn’t do another debt ceiling hike through the process this year. But as long as the bills fit into those different categories as governed by the Budget Act, they’re kosher.
“As an option, I don’t think its legal or procedural availability is controversial,” Super added.
Experts think Democrats could also tuck the debt ceiling lift into the current reconciliation package they’re working on, though that option may be politically more fraught.
Parliamentarian Is King
Just because it would procedurally work doesn’t mean Democrats like it. While there is robust precedent for raising the debt ceiling through reconciliation — it’s happened at least four times, Matt Glassman, a senior fellow at Georgetown’s Government Affairs Institute, told TPM — there is none for suspending or abolishing it.
“Many folks think that Democrats could not suspend the debt limit to a date in the future via reconciliation and that they could only raise it by a fixed amount, though there is some uncertainty here,” Molly Reynolds, a senior fellow at the Brookings Institute, told TPM.
The attack ads write themselves — or so Democrats seem to fear. Vulnerable Democrats are loath to see their names tied to some scary number in the trillions, although raising the debt ceiling is not actually creating new debt, just covering what we’ve already spent.
Even if Democrats opt not to fight for suspending or abolishing the debt limit, just raising it won’t be easy. Because they didn’t include a debt ceiling hike in the budget resolution governing the reconciliation package, they would now need to go back and amend it.
The picture is further complicated by a ruling Senate Parliamentarian Elizabeth MacDonough made a few months ago. The opinion, which Georgetown’s Glassman called “extremely vague and controversial, with which a lot of people disagree” is that an amendment to the budget resolution can’t be auto-discharged out of the Senate Budget Committee.
In normal situations, the budget resolution gets automatically put on the Senate calendar if the committee hasn’t acted by a certain date. Without that mechanism, the Republicans on the evenly split committee could boycott it and deprive it of a quorum.
It wouldn’t make much sense for Republicans to interfere like that, since Democrats hiking the ceiling alone in reconciliation is what they profess to want. But they could.
The Clock Is Ticking
Then there’s also the matter of timing.
Rep. John Yarmuth (R-KY) said this week that there isn’t time for Democrats to include the debt ceiling hike in their reconciliation package before the United States hits its borrowing limit, a process which will involve amending the budget resolution and getting it through committee, getting instructions to various committees with the legislation to hike the debt ceiling, hours of debate and a vote-a-rama.
“We cannot be certain when the Treasury hits the absolute end of its ability to juggle,” Rich Arenberg, director of Brown University’s Taubman Center for Politics and Policy, told TPM. “There might very well be insufficient time to choreograph the necessary steps in the budget process to get it done in time.”
If any of those political or procedural hurdles stop Democrats from addressing the debt ceiling in reconciliation, an alarming problem becomes a full-blown crisis.
“If that route is truly shut off, what’s left?” Glassman asked. “Just nuking the filibuster, or having some kind of showdown with Republicans with the stock market ticker on the floor and daring them to filibuster it.”