Democrats Should Raise The Debt Ceiling Now
Joe Biden giving a speech on raising the debt ceiling. Source: Reuters
After several months of relative harmony in early 2021, it seems as though Democrats are once again in disarray. The protracted conflict over infrastructure and reconciliation bills is nothing new. In recent weeks, raising the debt ceiling has been added to this list of issues. Democrats cannot come together to agree on how exactly they want to raise the arbitrary number that dictates how much the federal government can borrow. Republicans have already stated that they will not vote to raise the debt ceiling and that it is the responsibility of Democrats. The party in charge of Congress cannot decide if they want to force the issue or add it to their reconciliation bill. The Senate parliamentarian has already ruled that they can do so, since the debt ceiling is pertinent to the national bill.
The latest reconciliation bill is a perfect opportunity for Democrats to remove the debt ceiling from their list of issues. By adding the debt ceiling onto that extended piece of legislation, they can move on past the dangerous brinkmanship of the Republican Party and end the issue as a political football. As New York’s Eric Levitz argued in the headline of a recent article, “Democrats Must Raise the Debt Limit to a Quadrillion Dollars.” At the very least, a substantial raise in the debt ceiling will end any threat of default during a Democratic presidency.
The opposition of some Democrats to raising the debt ceiling by any means necessary makes sense. They want to force Republicans to take responsibility for their obstruction surrounding the issue. The debt ceiling facilitates money that Republicans voted on as well as Democrats. There is a basic inequity behind voting to authorize spending and then opposing that spending when the bill comes due. In addition, Democrats are frustrated that their governing trifecta can be derailed by the obstinate minority party. The hope is that by showing again and again how unfairly Republicans are using the filibuster, they may be able to convince Joe Manchin and Kyrsten Sinema to support its repeal.
But the problem of the debt ceiling is one that Democrats will not win. Democrats need some level of deficit spending to enact their policies, especially in times of recession when tax increases would be unwise. Republicans are happy to take on the anti-deficit party mantle, even when it has no basis in the reality of their governance. A large number of voters do not like debt and will side with the anti-debt party on any issues that focus on deficit spending. According to Gallup, 49% of voters care a “great deal” about the federal deficit. The basic dichotomy around deficits (deficits bad, pro-deficit party bad by default) can be broken if the policies discussed by Democrats will help Americans. The emergency coronavirus relief bills from 2020 and 2021 polled extremely well even though they added billions to the deficit. But a debt ceiling vote is only a question of debt. There are no positive spending programs to distract voters from uneasy feelings about debt. Therefore, Democrats will always be at a disadvantage on the question.
The debt ceiling is also a transient issue. Its salience to the American people completely disappears once it falls out of the news cycle. Some Republicans believe they will be able to punish Democrats for voting to raise the debt ceiling, but there is no evidence that it affected earlier elections or candidates known for their votes to raise it. Adding the debt ceiling to the reconciliation bill will both resolve the issue and fall out of the news cycle within a few days at the most.
Democrats need to pass both their infrastructure and reconciliation bills. They need to enact these major pieces of legislation to show voters that Democrats can pass important laws that will help the American people in material ways. Then, at some point they will hopefully be rewarded for these beneficial actions at the ballot box. A fight over the debt ceiling will not factor into any of those arguments. Democrats should run away from it as soon as they can.
If there was ever an issue that shows the dysfunction of how our works the debt ceiling is it. Nuke the f’n thing from orbit. If it turns out reality is all a Sim it will turn out that some being is really into parliamentary procedure and is running experiments to see how stupid it can be.Report
Honestly? My guess is the debt ceiling law is, in fact, not actually law anymore. (That’s assuming it was ever really Constitutional, as the mere specter of not raising the debt ceiling calls into question the validity of US debts, which is a big no-no).
That aside: Say you don’t raise the debt ceiling, a requirement based on a law written quite some time back.
Now the Executive is in a bind: They are legally required to spend the money Congress told them to spend. They are also legally barred from borrowing the money they need to spend as Congress directs.
Now, there’s a pretty easy and standard process the Courts follow when two laws directly conflict. If they are unreconcilable (such as this case, where spending is mandated but requires borrowing, which is barred), the newer law takes precedence.
So if the most recent budget bill requires borrowing more money than the Treasury is allowed, the most obvious answer is simply that….the most recent budget grants implicit authority to borrow, or flat-out nullifies laws preventing Treasury from borrowing as needed to spend as Congress directs.
Of course, settling this would require the debt ceiling to be hit, the Executive from running out of ways to shift funds around to defer borrowing, and finally going “Screw it, when faced with “Spend X but Don’t borrow Y” you told me to Spend X more recently, so I’m going the interpret that as you repealing the previous law.” and then months and months of court cases — all real big on “economic uncertainty” there.
I frankly don’t doubt the Executive would win. Congress gave them contradictory orders. Fulfilling one violates the other, buy the Executive is required to do BOTH. There’s no discretion to stay out of it, punt it back to Congress, etc. (Well there is, and past Executives have used it to delay borrowing. Which is just, frankly, good-faith efforts by the Executive to obey the will of Congress until it can’t anymore)Report
Just have to default to find out!
I forget the early SCOTUS ruling that basically said it won’t provide constitutional ‘advice’ absent a case? I think we had a write up here by Em or Burt.Report
The case and controversy requirement. The court won’t rule on hypotheticals or cases that are not ripe.Report
Well, in reality what would happen would be:
1. Treasury hits the debt ceiling.
2. Executive can find no other sources of funding.
3. Executive authorizes Treasury to borrow, claiming that by authorizing the spending in the first place, knowing it’d require borrowing, Congress authorized that borrowing.
4. Someone sues to stop them, literally attempting to force the US to default. That’d be fun.
5. It spends months in the Courts.
I mean for years we just used the Gephardt rule (which just put in boilerplate language in any spending authorization allowing Treasury to borrow as needed to cover it), and then of course we stopped that in 1995.
The Gingrich revolution led to so many great things, right? Lobotomized Congress like nobody’s business.Report
Yes, I expect you’re right… which is another reason I don’t really think any of this is about ‘defaulting.’ Though I think #5 would be within a week or two, not a prolonged court case. I believe the court can spring into action on constitutional crises like that.
Fun thought for the day… my suspicion is that the court would rule that whichever action the president took was the constitutional one. Like a Schrodinger’s SCOTUS ruling… there isn’t a Constitutional position other than the one taken by the Executive at the moment the box is opened. No matter what, that is what the court would affirm.Report
Congress abdicating it’s responsibilities creates a power vacuum. SCOTUS isn’t going to want that power itself so that leaves the President.Report
I never understood either side’s efforts here.
The GOP was insisting 50 Dems vote for it via reconciliation. It’s clearly a budget only thing so reconciliation is clearly possible. The Dems were insisting that it not be passed via reconciliation even though they have 50 votes?
What was going on here?Report
Parliamentary gamesmanship to tweek the narrative and win a news cycle. That’s about it.Report
Some Democrats want Republicans to own their prior spending choices because they believe its a millstone that should be hung around the neck of Republicans. Other democrats believe if they have to add the debt limit to the $3.5T bill already under reconciliation it will make it harder for Manchin and Sinema to support it – not that they do anyway. All this stems from a collective disbelief in Washington that the Republicans that they drink with after hours are really this hell bent on obtaining and maintaining power.Report
The Dems are seriously setting themselves up for a Lucy and the Football moment. Those two don’t support it. There’s a huge amount of work being done on something for which they have 48 votes.Report
I agree. but its the game the Democratic leadership knows how to play. And why my beer consumption isn’t going down much these days.Report
Well obviously the work is being done to figure out what number they do support.Report
Manchin has been consistently saying since July that $1.5 T is his dollar amount. What he hasn’t said – yet – is what he wants to pay with that amount. Which is where some Democrats no doubt see room to negotiate.Report
There is a lot to sort out.Report
I think the point was to put more pressure on Joe Manchin, who would have had to vote for the debt limit raise pretty much at the same time he’s trying to cut back the big infrastructure bill.
And the Dems refusing was about returning the favor, and putting pressure on Senate Republicans, many of whom do not want to vote either for or against a debt ceiling raise. Because there heart is not in any default, they know it will be bad, and it will land on their shoulders, and yet the crazy voters will also be mad if they vote to raise the limit.
I mean, I’m not ruling out that it looks good for the cameras and drives the news cycle, but I think there’s a more “bargaining position” aspect to this whole thing.Report
Manchin has no issues with the $1.5 T Infrastructure only bill the Senate passed and the House was supposed to vote on last week. He has problems with the larger and less bridges and sewer pipes $3.5 T Build Back Better bill that the House Progressives used to tank the infrastructure bill in that vote because they want all $5T of each bill.Report
Ok, I’m gamed out on this topic… left it all on the field in the previous thread.
You boys have fun storming the castle.Report