Senate Minority Leader Mitch McConnell (R-Ky.) predicted on Tuesday that no Republicans would back a bill to raise the federal debt ceiling, and instead called for Democrats to include such a measure in a reconciliation package and pass it in what would almost certainly be a party-line vote.
“I can’t imagine a single Republican in this environment that we’re in now–this free-for-all for taxes and spending—to vote to raise the debt limit,” McConnell told Punchbowl News in a Tuesday interview. “I think the answer is they need to put it in the reconciliation bill.”
McConnell has been a vocal critic of the Biden administration’s massive spending proposals.
On July 31, the Treasury Department bumps up against its statutory debt cap, which Congress temporarily suspended in 2019. If the suspension is allowed to lapse at the end of July, Treasury will be unable to raise additional funds by selling government securities and will have to resort to emergency measures to keep meeting its debt obligations, but stop-gap moves are effective for only a short time.
Last month, Treasury Secretary Janet Yellen urged lawmakers to hike the debt limit, warning of “absolutely catastrophic economic consequences” if the borrowing cap is not raised, arguing that a default on U.S. government debt obligations “would precipitate a financial crisis, it would threaten the jobs and savings of Americans at a time when we’re still recovering from the COVID pandemic.”
Democrats are reportedly mulling several options for heading off debt payment problems, such as a standalone funding bill in September, when the current fiscal year ends, or attaching a debt-ceiling increase to the $600 bipartisan infrastructure bill being negotiated in the Senate. Democrats could also include a debt-ceiling hike in the reconciliation package, a politically perilous move as it requires lawmakers to specify a new borrowing limit, putting lawmakers who back higher debt into voters’ crosshairs.
Last week, Democrats on the Senate Budget Committee said they reached an agreement on a $3.5 trillion package that they will try and pass through the budget reconciliation process via a simple majority, sidestepping the need for any Republican backing. The package—which is separate from the $600 billion bipartisan infrastructure measure—contains many provisions backed by President Joe Biden, including on climate change, expanding Medicare, and plans to address “human” infrastructure.
“The budget resolution with instructions will be $3.5 trillion. You add that to the $600 billion bipartisan plan, you get to $4.1 [trillion], which is very, very close to what President Biden asked us for,” Senate Majority Leader Chuck Schumer (D-N.Y.) told reporters on July 13. “Every major program that President Biden has asked us for is funded in a robust way.”
A failure by Democrats and Republicans to work out their differences over whether government spending cuts should accompany an increase in the statutory debt limit could lead to a federal government shutdown, something that has happened three times in the past decade.
“Every time, it’s messy,” the top Republican on the Senate Finance Committee, Mike Crapo, told Reuters when asked about the process of adjusting the debt limit.
He added that, in his nearly three decades in Congress, he had pushed for spending cuts in debt-ceiling negotiations and that he would also be seeking cuts this time around.
Democrats have insisted on a debt limit increase unconstrained by spending cuts.
Reuters contributed to this report.