The debt ceiling refers to the government’s ability to borrow to pay its bills. Lawmakers have until Oct. 18 to raise the cap by a specific amount or suspend it until a particular date — or else the U.S. government could face a crisis so stark that the Biden administration has warned it could thrust the country back into a recession.
Democrats and Republicans agree that the dangers of default are vast. But GOP lawmakers led by Senate Minority Leader Mitch McConnell of Kentucky have refused to supply the 10 necessary votes for Democrats to overcome a filibuster on a plan to suspend the debt limit in the chamber — part of the GOP’s broader efforts to oppose Biden’s economic agenda.
Earlier Tuesday, McConnell reiterated his belief that Democrats instead should use a process known as reconciliation to address the debt ceiling. The move would allow the party to raise the borrowing cap using a majority, rather than the typical 60 votes required in the Senate, preserving the ability of Republicans to withhold their support.
But Senate Majority Leader Charles E. Schumer (D-N.Y.) has said repeatedly that reconciliation is not an option for Democrats, since it is “risky” and time-consuming — threatening perhaps to take too long and push the country into default. The Senate is set on Wednesday to consider instead a House-passed measure to suspend the debt ceiling in 2022, the third such measure Republicans are expected to block.
With the standoff only intensifying, Biden on Tuesday for the second time this week lambasted Republicans. “There’s not many options if they’re going to be that irresponsible. … There’s not much time left to do it by reconciliation,” he told reporters.
If the process bogs down because of a filibuster, lawmakers would have even less time. Asked about loosening the rules specifically to address the debt ceiling, Biden replied: “I think that’s a real possibility.”
For Biden, the suggestion itself amounts to a significant political development. The president has been reticent to call for a full repeal of the power available to the minority party, even as Democrats newly in charge of the House and Senate fail to advance long-sought police, election and gun reforms, partly in response to sustained GOP opposition.
Instead, Biden has called for a return to the “talking filibuster,” which requires protesting senators to command the floor for as long as they wanted to hold up debate. Otherwise, he said in July, the elimination of the rule entirely could “throw the Senate into chaos.”
Even as recently as last week, the White House appeared disinclined to pursue a solution to the looming debt ceiling crisis by seeking a change in one of the Senate’s most fundamental rules. Press secretary Jen Psaki said during a briefing in late September that Biden’s position “has not changed on that,” adding only that he was working with Schumer “on a path forward.”
With the debt ceiling, though, the stakes are high: Biden and his top aides have warned that congressional inaction could destabilize the global economy. It could delay seniors’ Social Security checks, for example, and result in rising interest rates that make it more expensive for Americans to own homes. A default could further rattle stock markets domestic and foreign, plunging the United States into another recession, only months after emerging from the last downturn during the darker days of the coronavirus pandemic.
The mere prospect of a default roughly a decade ago sent stocks tumbling, terrified investors and prompted credit-ratings agencies to warn about a possible downgrade. This year, Mark Zandi, the chief economist at Moody’s Analytics, found that it could cost the economy roughly 6 million jobs, eliminate as much as $15 trillion in household wealth and send the unemployment rate surging to roughly 9 percent.
Despite the dire warnings, however, Senate Republicans have blocked two attempts by Democrats to suspend the debt ceiling in recent weeks — as McConnell and his allies argue that they do not wish to support Biden as he pursues trillions of dollars in new economic spending initiatives. GOP lawmakers are expected to deliver a third defeat Wednesday, when Schumer tries to advance a new measure to suspend the borrowing cap. That procedural move requires 60 votes, which Democrats do not have without GOP support.
The prospect of another defeat loomed large over Democrats as they gathered Tuesday for their weekly lunch. Emerging from the private gathering, some party lawmakers said there had been renewed talk about addressing the issue through different means — perhaps by weakening the filibuster so that the usual 60-vote threshold for most chamber activity would not apply to the debt ceiling. In that case, Democrats could rely on their tiebreaking majority, with Vice President Harris casting the deciding vote.
“There’s a lot more conversation because Mitch McConnell is threatening to blow up the economy,” said Sen. Jeff Merkley (D-Ore.), a longtime advocate of the issue. “The level of frustration in the [Democratic] caucus has gone through the roof.”
But tweaking the filibuster requires the full support of Senate Democrats, which has eluded some of the party’s leaders in the past. Two of the party’s most pivotal swing votes, Sens. Joe Manchin III (D-W.Va.) and Kyrsten Sinema (D-Ariz.), each has expressed an unwillingness to rethink the power of the minority to hold up debate in a chamber where historically even one senator can grind policy to a halt.
“I’m not going to say anything about it,” Manchin told reporters Tuesday.
Schumer, for his part, declined to offer any indication as to the exact road ahead.
“We all know that Senate Republicans have manufactured a crisis that threatens to plunge our economy back into recession,” he said at a news conference. “We do not have the luxury of using a convoluted, drawn-out and risky process.”
Jacqueline Alemany, Annie Linskey, and Jeff Stein contributed to this story.