We don’t want to tempt fate with a couple of weeks left. But it appears that America will make it into the new year without collapsing.
Congress reached a deal last week on a process to raise the debt ceiling, a stupid law that limits how much the government can borrow to pay all of its obligations. Were it not raised—and it always comes down to the wire—the country could have faced sovereign debt default and sparked a global recession. It would have been bad.
Under the brief bill that Senate Democrats introduced and will pass (with Democratic votes only) on Thursday, the debt ceiling will be increased by $2.5 trillion, or “to a level commensurate with funding necessary to get into 2023,” as Senate Majority Leader Chuck Schumer said on the Senate floor. In other words, this gets Congress past the midterm elections, at which point they’ll have to deal with this toxic issue again.
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And when they deal with it again, it may be more toxic than ever. In extending the limit to 2023, instead of, say, 2025, or 2029, or 3029, Democrats, who are at prime risk of losing at least one chamber of Congress in the midterms if not both, are setting up a fight reminiscent of the 2011 debt ceiling crisis, when the new House Republican majority brought the country to the brink of default as it insisted on spending cuts from Democrats and the Obama administration. And it’s not as if House Republicans have gotten any more easygoing in the 10 years since.
So why did Democrats set themselves up for such impending drama? This debt ceiling deal, reached between Schumer and Senate Minority Leader Mitch McConnell, required each to give a bit.
McConnell had to back down, for a second time this year, on his insistence that Republicans would not lift a finger to help Democrats raise the limit. Instead, he agreed to pass a separate law that would allow Democrats, just this one time, to raise the debt ceiling without threat of a filibuster. McConnell has endured a lot of grief from Republicans for easing up. South Carolina Sen. Lindsey Graham reportedly said McConnell led Republicans “on a charge up a hill and they were getting shot in the back,” while Donald Trump urged Senate Republicans, once again, to “GET RID OF MITCH!”
Schumer, meanwhile, had to agree to raise the debt ceiling by a specific dollar amount rather than simply suspend it for a period of time, as had become practice over the last decade. Getting Democrats to own “the number” was a top political goal of Republicans, who want to run scary, and misleading, ads throughout the election cycle about the wild and wacky Democrats and their terrifying spending habits. Keep in mind that raising the debt ceiling doesn’t, itself, spend more money; it allows the government to finance existing obligations, many of which were passed on a bipartisan basis.
Since Democrats have to own “the number,” then, why are they opting for an increase of only $2.5 trillion instead of $5.5 trillion, or $22.5 trillion? Or infinity dollars? Would Democrats really lose that many voters on the margin if the scary-sounding number was a bigger scary-sounding number—but one that made sure they didn’t have to deal with this again, at least in the first term of the Biden administration?
“Democrats of course would’ve wanted to raise [the debt limit] by a bajillion,” one senior Democratic Senate aide told me, but the $2.5 trillion number—which kicks the debt limit to 2023—“was part of the deal Democrats cut with Republicans.” If that’s true—that Republicans wouldn’t agree to this without Democrats going small—it must have been a backroom deal that wasn’t actually put into writing: According to the official bill, Democrats had the discretion to fill in the blank on a debt ceiling increase with any number they wanted. Maybe, though, it was more about Democrats, still mired in Build Back Better negotiations, getting cold feet at big dollar amounts.
Whatever the reason, $2.5 trillion is enough for House Republicans, who feel they already have one foot in the door of the House majority in 2023 and are now fantasizing about a future showdown. What delicious treats should they demand in exchange for the next debt ceiling increase? Regular ol’ domestic spending cuts? A rollback of the Build Back Better Act, assuming it ever gets signed into law? Medicare cuts?
Conservative lawmakers “are already calling for and strategizing around a fiscal clash in 2023, insisting on using the threat of federal default to place new curbs on government spending and reduce the $28 trillion national debt,” the Washington Post reports. “What they are envisioning is, at a minimum, a return to the brinkmanship seen the last time a Democratic president confronted a new Republican majority, in 2011. It already threatens to become the dominant domestic political clash ahead of the 2024 presidential election.”
The Tea Party Republicans who swept into power in 2011 muted their concerns about deficits when Trump came to office. And if Republicans retake the White House in 2025, we should expect this sudden panic over the alarming amount of federal debt to go quiet, again. But in 2023: What fun!
If Democrats do lose the House and/or the Senate next November and want to avoid this nightmare, they would have one more option: Take quick action in the lame-duck session before Republicans take over. If they can get Sens. Joe Manchin and Kyrsten Sinema to go along, Democrats could pass a party-line, filibuster-free reconciliation bill to raise the debt limit far out into the future. If they can’t, they’ll be handing Republicans a loaded gun.
