News Analysis
Even as Republicans and Democrats came together Tuesday to pass the Infrastructure Investment and Jobs Act, a political battle between the two is shaping up in Washington—this time over raising the debt ceiling.
The debt ceiling, the federal government’s borrowing limit, can only be raised through congressional action. Should Congress fail to raise the borrowing limit, the U.S. government would face default, a move which Treasury Secretary Janet Yellen says should be “unthinkable.” Such a default, Yellen warned, “would have absolutely catastrophic economic consequences.” The deadline for averting a default is fast approaching—though the Treasury has resorted to “extraordinary measures” to continue to fund U.S. obligations, the federal government will run out of money entirely by October without the go-ahead from Congress to issue new bonds.
Despite these risks, this dire threat has long been used by minority parties in the House to extract concessions from the opposition. Republicans used the threat of not raising the limit especially effectively during the Obama administration, forcing the former president to agree to spending cuts in exchange for congressional Republicans raising the debt ceiling.
Despite the economic necessity of raising the limit, voting for debt ceiling raises are unpopular (pdf) with the majority of American people.
On Tuesday, Republicans led by Sen. Ron Johnson (R-Wis.) prepared a new strategy that would force congressional Democrats to take the brunt of the blame for increasing the limit. Almost every Republican senator in the body signed a petition created by Johnson vowing to not vote for a debt ceiling increase. “We, the undersigned Republican Senators, are letting Senate Democrats and the American public know that we will not vote to increase the debt ceiling, whether that increase comes through a stand-alone bill, a continuing resolution, or any other vehicle” the letter read.
Predictably, Democrats were displeased with the move, and several leaders in the party expressed that they felt that the Republican senators were bluffing. “I can’t believe Republicans will let the nation default,” Senate Majority Leader Chuck Schumer (D-N.Y.) said at a press conference. President Joe Biden is also confident that Republicans will vote to raise the ceiling. When asked whether he was worried about the situation, Biden curtly responded: “Nope. They’re not going to let us default. $8 billion—$8 trillion of that is on the Republican’s watch.” Press secretary Jen Psaki noted the same day: “Raising the debt limit has been done 80 times … in a bipartisan fashion. Ninety-nine percent of [the debt] existed before President Biden took office.” She added that Republicans would also face pressure from “former leaders from both sides of the aisle [who] are eager to see Congress raise the debt limit and not face default.”
But Republicans are adamant that they aren’t bluffing. In an interview for Punchbowl News, Senate Minority Leader McConnell (R-Ky.), who signed Johnson’s letter on the top line, said “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.” In a Fox Business interview, Sen. Rick Scott (R-Fla.) said that a caucus of Republican senators agreed that they “would not raise the debt ceiling without structural change.” Scott explained that as part of this “structural change” the government, like “every family in this country, must learn to live within [its] means.” Other big-name Republican senators signed the publicly released letter, including the libertarian-leaning Rand Paul (R-Ky.) and former presidential candidates Mitt Romney (R-Utah), Lindsey Graham (R-S.C.), and Marco Rubio (R-Fla.).
Given the consequences of not extending the debt ceiling, it is unlikely that Congress will not act. Democrats were hesitant to include a debt ceiling increase in Sen. Bernie Sanders’ (I-Vt.) budget proposal and reconciliation bill, as the move would have put the onus of public scrutiny on the party. After Congress returns from their recess, harsh debates will likely ensue over the issue in both chambers. Still, if Democrats are unable to break the Republicans away from their pledge, it is likely that they will accept the necessity of including the debt ceiling increase in the budget proposal.
