For the past two years, the federal government has been unfettered in its ability to borrow all the money it needed to pay the nation’s bills.
Congress temporarily suspended the debt ceiling as part of the Bipartisan Budget Act of 2019, but the blank check is set to expire on July 31, leaving lawmakers to fight over how much to raise the borrowing limit, if at all.
Senate Republicans are threatening to vote against a debt ceiling increase and have called on Democrats to lift it unilaterally using a budgetary tactic called reconciliation, allowing certain legislation to pass with only a simple majority rather than the 60 votes needed for most other bills.
Republicans say they are unwilling to endorse a debt limit increase because Democrats are promoting a staggering spending spree that could ultimately cost more than $5 trillion and result in significant tax increases.
The nation’s debt currently exceeds $28.5 trillion.
“I don’t think there is any appetite among our members to vote for a big increase in the debt limit when Democrats are in the process of adding so much to the debt,” Senate Minority Whip John Thune said. “My view is, the debt limit ought to ride on all the other stuff they want to do. I don’t think Republicans ought to enable them to spend trillions and trillions of dollars on things that are designed to grow government.”
Sen. Ron Johnson, a Republican from Wisconsin, said Congress has increased the debt ceiling nine times since he took office in 2011 and added $5 trillion in debt over the past 18 months.
“From my standpoint,” Johnson said this week, “if we increase the debt ceiling, we ought to have some measure of fiscal control.
Lawmakers have authored several measures aimed at reining in debt. For example, Sen. Mitt Romney, a Utah Republican, won the backing of a group of GOP and Democratic lawmakers for legislation that would work to make critical federal funds such as Medicare and the highway trust fund, which are running out of money, more solvent.
Johnson and several other GOP Senators introduced the Federal Debt Emergency Control Act, which would require the Office of Management and Budget to declare a “Federal Debt Emergency” when the federal debt exceeds 100% of the Gross Domestic Product and to return unspent federal funds to the Treasury.
Democrats rejected the Republican viewpoint on the debt, and many argue there should be no debt ceiling at all, which would end the regular partisan battles over the matter.
The federal government needs to borrow money to pay off bills, not to initiate new spending, Democrats argue, and Republican opposition risks putting the United States in default on its loans and running out of money to operate.
“This is no time to play games with keeping the government open,” Senate Majority Whip Dick Durbin, an Illinois Democrat, told reporters in the Capitol.
Senate Majority Leader Chuck Schumer lashed out at Republicans and Minority Leader Mitch McConnell on the Senate floor on Thursday for calling on Democrats to go it alone on raising the debt ceiling. Schumer declared the GOP was threatening to oppose paying off debt racked up during the Trump administration.
Some of the debt was added thanks to a trio of bipartisan COVID-19 aid measures passed during the Trump administration, as well as other spending prior to President Joe Biden’s time in office.
“The leader’s statements on the debt ceiling are shameless, cynical, and totally political,” Schumer said of McConnell, a Kentucky Republican. “This debt is Trump debt. It’s COVID debt. Democrats joined three times during the Trump administration to do the responsible thing. And the bottom line is that Leader McConnell should not be playing political games with the full faith and credit of the United States. Americans pay their debts.”
Democrats, who control majorities in the House and the Senate, will have to add the debt battle to their packed to-do list.
Party lawmakers are struggling to pass a $1.2 trillion infrastructure bill and are searching for consensus on a second $3.5 trillion spending package they hope to pass later in the year. Lawmakers must also find a way to fund the government after fiscal year 2021 spending expires on Sept. 30. The Senate is lagging behind on passing spending bills, which means a stopgap measure may be necessary.
The nonpartisan Congressional Budget Office delivered a bit of good news on the debt ceiling this week, telling Congress the Treasury can use extraordinary measures that will allow it to finance the government past the July 31 deadline, until October or November.
After that, the CBO warned, “the government would be unable to pay its obligations fully, and it would delay making payments for its activities, default on its debt obligations, or both.”
