The early warning comes a day after Senate Republicans gathered to adopt their conference’s guiding rules for this session of Congress. Unanimously, the GOP members agreed to a nonbinding yet symbolic statement that they would not raise the debt ceiling unless lawmakers also cut by a similar amount or made other structural changes to government programs.
Senate Republicans agreed to stake the position at the request of Sen. Rick Scott (Fla.), who regularly has joined other Republicans in blasting Biden and his Democratic allies for seeking major spending increases, including as part of $2 trillion infrastructure plan.
The debt ceiling is the amount of money the U.S. government can borrow to finance its obligations. Congress suspended the limit through June 2021, at which point lawmakers must vote to suspend it again or raise the amount — or eventually risk an unprecedented default that would carry catastrophic consequences for the global economy.
Under Trump, Republican lawmakers did not demand spending cuts as they raised the debt ceiling several times, even as the former president shelled out massive sums to fund his priorities, including the military. But the GOP historically has sought to use the debt as leverage in political fights against Democrats, at one point putting the country at risk of default under former president Barack Obama to secure a decade of caps on domestic spending.
Fearing a return to those fights, Democratic Sen. Ron Wyden (Ore.) on Wednesday blasted Republicans for trying to hold the “debt ceiling hostage” in a move that threatened massive consequences for the global economy.
“This is a page from the Obama-era economic sabotage playbook, and I’m not going to let Republicans play games with the economy for their political benefit,” he said in a statement.
To avert a showdown, Democrats may have at their disposal a budget process known as reconciliation that could allow them to raise the debt ceiling with only 51 votes. But some of the party’s members have expressed a reticence to use reconciliation too often. The process also would not allow Democrats to suspend it outright, much as they did two years ago, according to Senate aides.
If Republicans refused to raise the debt ceiling, many economists have warned that it could lead to an economic crisis because confidence in U.S. government debt could plummet. In 2020, the government ran a $3.1 trillion deficit, meaning the government spent $3.1 trillion more than it brought in through revenue. It made up the difference by issuing debt and borrowing the money. If it cannot borrow more money, the government would be unable to pay all its bills.