The fast-approaching debt deadline causes a flat-footed Congress to snap
Senate Majority Leader Chuck Schumer (DN.Y.) and other Democrats have drafted a proposal to extend the debt limit until next year’s election. They’re not ready to call that play on the Senate floor just yet, given the real possibility that a Republican filibuster of that debt increase could send economic forecasters into a downward spiral. Instead, the chamber is focusing this week on judicial elections.
In an ominous sign for House Republicans who refuse to budge, several senators in President Joe Biden’s party predicted that Congress will end up passing a clean debt increase or “something close to”[ads1]; cleaning, in the words of the senator. Angus King (I-Maine), which caucuses with Democrats. Some Democrats signaled they would be willing to make significant spending concessions — but only after the debt ceiling drama is resolved.
“We should pass a clean debt ceiling, and then we should find a way forward so we don’t do this every year,” the senator said. Jon Tester (D-Mont.), who faces a difficult re-election campaign, “I would like to see it done by figuring out how we can reduce the deficit and reduce the debt over the long term. And quite frankly, get to a point where we have a balanced budget.”
Still, Senate Republicans aren’t backing down from the speaker Kevin McCarthyits negotiating position. They support his hard-line tactics as the GOP’s opening bid to avoid default — negotiating with Biden by passing a conservative wish list — and are aware that any movement away from McCarthy right now weakens the party’s position.
When asked if he would vote for a clean debt bill, Sen. Mitt Romney (R-Utah), no stranger to bipartisan deals, responded that “I support the House provision.”
“We should get out of the Senate and just let Biden and McCarthy make a deal. It should be a little encouraging that Biden has now decided to get up from the couch, Sen said. John Cornyn (R-Texas), an ally of Senate Minority Leader Mitch McConnell. “It’s not going to be a mere increase of the debt ceiling.”
Of course, Senate Republicans have said it before and twice backed down in 2021, raising the debt limit without strings attached. It’s clear Schumer sees the same opportunity: He spoke with Biden about a “clean” increase in the debt ceiling on Monday, according to a spokesman, and released a joint statement with the House Minority Leader Hakeem Jeffries (DN.Y.) demands a debt increase without concessions.
But with McCarthy leading the House, conditions are less favorable for that kind of outcome. And several deal-making GOP senators who provided key debt ceiling votes last Congress have resigned, replaced by more conservative members.
Puts a finer point on it, Sen. Lindsey Graham (RS.C.) said, “I don’t think there are 10 Republican votes to undercut Kevin McCarthy.”
These factors have forced the Senate GOP into lockstep behind McCarthy, who passed an increase in the debt ceiling last week that includes the repeal of major Democratic priorities and blunt spending cuts.
When asked if it is good for GOP leaders to meet with Biden, the conservative senator says. Ron Johnson (R-Wis.) chuckled and said he would take a positive view of it for now: “Maybe this is progress. We will urge Majority Leader Schumer to put the House bill on the floor.”
Some Democrats say they’ll be fine with that. Sen. Tim Kaine (D-Va.) said he would “feel very comfortable” voting down McCarthy’s bill to show it cannot pass the Senate.
A failed vote on a mere increase in the debt ceiling may be less palatable to Republicans who may be painted as obstructionists by Biden’s camp. Cornyn said the Senate shouldn’t take that path: “I don’t think it helps to get anything done for the Senate to weigh in. We know it’s a Biden-McCarthy deal.”
Schumer is instead deploying his troops to hold hearings on the House bill and focus on attacking its potentially corrosive effect on government programs and the people who depend on them. His allies said the party is not backing down from its position: A mere increase in the debt ceiling is the precursor to negotiations.
Baked into the moods of both parties are memories of 2011, when Democrats balked when debt ceiling talks with the House of Representatives resulted in a higher borrowing limit but ultimately blunt budget cuts.
“The Senate should vote for a clean debt ceiling. And we should have 100 votes for it,” the senator said. Elizabeth Warren (D-Mass.), who serves on Schumer’s leadership team.
However, crises have a way of distorting established positions. Yellen’s warning about the impending deadline came just after markets closed Monday, and a month is a long time in Congress. There are already whispers of canceling the next congressional recess to deal with a clash that could quickly consume all of Washington.
There are also GOP doubts about how real Yellen’s stated early June deadline is. The independent Congressional Budget Office, which previously said the US could default sometime between July and September, agreed with Yellen on Monday that there is a “significantly greater risk” that the Treasury Department would run out of cash next month thanks to a disappointing tax season.
The Bipartisan Policy Center, a think tank that also specializes in predicting debt default dates, plans to release its updated estimate next week after waiting for full tax season data.
Still, Republicans feel they have a stronger negotiating position because the House GOP passed a bill and the Democratic Senate has not. Sen. Shelley Moore Capito (RW.Va.), a member of her party’s leadership, said McConnell should “support the speaker and his efforts, and I think that’s what he will do.”
“The ball is in their court,” she said of the Democrats.
Daniella Diaz contributed to this report.