Democrats and Republicans have one thing in common when it comes to raising the federal government’s debt ceiling: They each frame the standoff as an illustration of the other’s fiscal irresponsibility.
To Senate Minority Leader Mitch McConnell, the answer is straightforward: If Democrats wish to go it alone and pass a $3.5 trillion spending bill through reconciliation, they should also use that budget tool to raise the debt ceiling and pass it exclusively with Democratic votes.
President Joe Biden is leading Democrats to reject any attempt to link the debt ceiling extension with their own trillions of dollars in proposed new spending. They argue Republicans ran up mountains of debt when they controlled Congress under former President Donald Trump and refuse to pay now that the bills are coming due.
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“There’s not many options if they’re going to be that irresponsible,” Biden said Tuesday of the practical considerations against raising the debt limit through the same budgetary mechanism Democrats plan to use for their social welfare and climate spending package. “There’s not much time left to do it by reconciliation.”
“Why let McConnell off the hook or Republicans off the hook? I mean, this is their debt that they chalked up themselves,” White House press secretary Jen Psaki told reporters on Monday when asked why reconciliation for the debt ceiling was a nonstarter. “This is a period of time where we could easily solve this in the next two days and easily do that through allowing Democrats to be the adult in the room, despite the fact that Republicans spent like drunken sailors over the last four years before President Biden took office.”
At that briefing, the White House displayed a chart crediting the Trump administration with $8 trillion of debt, compared to the Biden administration’s $676 billion. Psaki said the pay-fors included in the $3.5 trillion reconciliation package effectively reduced the price for households earning less than $400,000 a year to zero.
“So what Sen. McConnell is refusing to do is to pay the debts of what were rung up under his leadership when he was in the Senate — still continues to be, of course — and when Trump was president,” Psaki said. “The debt limit is about paying for bills we have already spent. It is not about initiatives that we’re talking about and debating now.”
“It has nothing to do with my plan for infrastructure or building back better,” Biden said in a speech of his own Monday. “Zero. Zero. Both of which, I might add, are paid for.”
Biden repeated this pitch in a speech in Michigan on Tuesday.
“And best of all, the cost of these bills, in terms of adding to the deficit, is zero. Zero. Zero,” he said in a congressional district Trump won last year. “And I made a commitment when I wrote these when I was running: No one making under $400,000 a year will see a penny in their taxes go up. That’s why, in the infrastructure bill, there is no gas tax increase, because people making under [$400,000] would have to pay more.”
The president has argued that raising the debt ceiling is usually a bipartisan exercise, but for some reason, Republicans are currently balking.
“So, if we’re going to make good on what’s already been approved by previous Congresses and previous presidents and parties, we have to pay for it: Social Security benefits the American people were promised, salaries for servicemen and -women, benefits for veterans,” he said on Monday. “We’re going to have to raise the debt limit if we’re going to meet those obligations.”
Not so fast, McConnell said in a letter to Biden on this issue.
“As you and I know from shared Senate experience, this is not unusual. The debt limit is often a partisan vote during times of unified government. In 2003, 2004, and 2006, Mr. President, you joined Senate Democrats in opposing debt limit increases and made Republicans do it ourselves,” he wrote. “You explained on the Senate floor that your ‘no’ votes did not mean you wanted the majority to let the country default, but rather that the President’s party had to take responsibility for a policy agenda which you opposed. Your view then is our view now.”
“Bipartisanship is not a light switch that Speaker Pelosi and Leader Schumer may flip on to borrow money and flip off to spend it,” McConnell stated. “Republicans’ position is simple. We have no list of demands. For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well.”
Twice under former President Barack Obama, Republicans sought fiscal policy concessions in exchange for a higher debt ceiling. In August 2011, S&P issued the first-ever downgrade of the federal government’s credit rating in response to the first of these stalemates.
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The fight is happening in the context of a longer-term debate. Republicans make peace with deficit spending when they hold the White House but then regain their commitment to fiscal discipline when Democrats are in charge. Democrats, in turn, tend to use their time in power to enlarge the welfare state and direct new benefits to voters while complaining of deficit-financed tax cuts when the GOP controls Congress or the White House.
Treasury Secretary Janet Yellen said in a letter to Congress last week that unless lawmakers act by Oct. 18, the federal government may not be able to meet its financial commitments. She warned that the estimated date can “unpredictably shift forward or backward.”
