The current standoff over raising the federal debt limit is not just the dumbest-ever standoff over raising the debt limit. It’s not just the dumbest self-made congressional crisis in recent memory. It is one of the dumbest situations in which any random 100 people have ever put themselves. In this case, regrettably, the 100 people are United States senators who are responsible for maintaining the country’s full faith and credit.
And on late Wednesday afternoon, they appeared to come to an appropriately dumb, temporary resolution as the crisis was reaching a head and, for them, the most alarming crisis of all—the risk of losing next week’s recess—was coming into view: Let’s do this again in a couple more months.
Though it’s been done elsewhere, it is worth elaborating on what makes this particular debt ceiling standoff so very, very stupid.
Subscribe to the Slatest Newsletter
A daily email update of the stories you need to read right now.
The last major drag-out debt ceiling fight, in 2011, was the dumbest thing that had happened up to that point. Seeing what we’ve seen now, it looks like a negotiation between Jefferson and Hamilton. The Republican-led House of Representatives wanted spending cuts and took the federal borrowing limit hostage—creating the ensuing threat of Treasury defaulting on its debts, which would have catastrophic consequences for the U.S. and world economy—in order to secure them. These were not fun times. But at least it was a negotiation between counterparties with discrete policy asks. The two sides ultimately reached a deal to impose annual spending caps, which were subsequently adjusted every time they were about to come into effect.
This time, it’s Senate Republicans who are doing the hostage-taking, and they “have no list of demands,” as Senate Minority Leader Mitch McConnell said in a letter to President Joe Biden earlier this week. Republicans’ only stipulations have been procedural: They insist that the debt ceiling must be raised, but that they will not offer a single vote to do so. They want Democrats to raise the debt ceiling, on their own, so that they can disingenuously argue that “Democrats added X trillion dollars to the debt” in campaign ads next year. (Increasing the debt ceiling does not increase the debt. It just allows Treasury to finance existing obligations that Congress has already approved.)
Democrats have agreed to put up the votes themselves, but that’s not good enough for McConnell. Instead, he has insisted they do it through the filibuster-free reconciliation process, instead of through normal procedures. Republicans want that for a couple of reasons. First, it’s a tedious, convoluted process that would eat up a lot of time and allow for Republicans to throw up difficult messaging votes, just as Democrats are trying to focus on passing their Build Back Better agenda. The other reason is that doing it through reconciliation, for dumb (dumb!!) parliamentary reasons, would force Democrats to raise the debt limit to a specific number, rather than suspend the limit until a certain date.
Not all Democrats, but some, are terrified of raising the debt limit to a very scary number without any political cover from GOP members. Republicans are being ridiculous in trying to force Democrats to do something they all agree must be done through a convoluted process so they can get Democrats to own “the number.” But they’re only getting away with it because some Democrats are being ridiculous in caring about this.
On an even more primal level of politics, though, it comes down to pride. Democrats feel passionately that since they didn’t play these aggressive debt ceiling games with Republicans under Trump, Republicans must not play them with Democrats under Biden. Worse yet for these Democrats: Mitch McConnell is telling Democrats to do something, and so Democrats can’t.
The standstill, as of Wednesday morning, looked like this: Senate Republicans were resolute that they would not offer a single vote and would filibuster any attempt by Democrats to raise the debt ceiling through normal procedures, in order to force Democrats to initiate the reconciliation process. Senate Democrats were resolute that they would, under no circumstances, increase the debt limit through reconciliation. Democrats began discussing killing the filibuster for debt ceiling increases, but it was in no way clear they could rally the votes to do that.
McConnell, then, made an offer to Democrats with a couple of options.
One option was that Republicans wouldn’t draw out the reconciliation process if Democrats used it for a debt limit hike. The other was that Republicans would allow Democrats to pass, through regular order, a short-term increase until December to give Democrats more time to pass a long-term hike through reconciliation.
Many Democrats were enraged at the offer when they first heard about it.
“What kind of an offer is that?” Hawaii Sen. Mazie Hirono told reporters. “It’s bullshit.”
After an emergency meeting, though, Senate Democrats emerged to declare victory, and suggested that they could live with McConnell’s offer of a short-term increase—but still would never, ever pass a long-term increase through reconciliation.
“McConnell caved,” Massachusetts Sen. Elizabeth Warren told reporters after the meeting. The short-term increase would give them time, meanwhile, to focus on passing their Build Back Better Act.
This two-month punt, assuming they can seal the deal in the next couple of days, is not worthy of discussions of winners and losers, of who caved or got rolled. Such analyses should be saved for when a crisis is over, and it sure isn’t. Come December, this dumb standoff over the procedure by which something that everyone agrees must be passed is passed, will be precisely where the senators are leaving it this week.
The only sure bet is that it will get stupider.
