Congress raises nation’s debt limit, but thorny December deadlines loom

The House raised the nation’s debt ceiling on Tuesday, averting a default for about three months but setting up a tougher political hurdle for Democrats at the end of the year.

The bill was packaged with several other measures so there was no standalone vote on the unpopular debt limit increase. The larger package passed 219 to 206. The Senate had previously approved the increase, which now goes to President Biden’s desk.

With a default off the table for now, Democrats are hoping to turn their attention to enacting Biden’s “Build Back Better” program, which would reshape the nation’s social programs and improve its aging infrastructure. Leaders hope to finalize the package by the end of the month, but there are significant questions about whether Democrats can overcome their policy differences that quickly.

And lurking beyond Biden’s top policy priority will be the same debt ceiling — which will probably need to be raised again in December or January — and a Dec. 3 deadline to continue government funding to avoid a shutdown.

Allowing the debt limit to be breached would cause the nation’s first default on its debt, with the potential to set off a global recession. A lapse in government funding, which has happened several times in recent years, would shutter national parks and museums, and jeopardize federal programs.

Congress has a record of punting its toughest priorities until the end of the year, with leaders using the threat of forcing members to stay in Washington over the holidays as a pressure point to get things done. But this year’s task list is more grueling, with significant political stakes for Biden’s agenda and the 2022 midterm election to decide control of Congress.

“December in Washington is always a challenge, and this one will be the most challenging in recent memory because the scale and import of the various legislative priorities is greater than any in recent memory,” said Mike Spahn, a partner at Precision Strategies and former longtime senior Democratic Senate staffer.

The debt limit could prove particularly complicated because Republicans are insisting Democrats do it by themselves, though previously it has been done with at least some bipartisan support. There is no clear path forward, and while both parties — chiefly the GOP in recent years — have used the debt limit as a political cudgel in the past, neither appears prepared to tank the economy over it.

The vote Tuesday to allow for more federal borrowing for about three months — the exact date the new spending limit would expire is not yet known — amounted to a short-term win for Democrats.

They refused to give in to Senate Minority Leader Mitch McConnell’s (R-Ky.) demand that Democrats lift the debt ceiling with only their own votes, using the same filibuster-proof procedural tool Democrats hope to use to enact their social spending bill. McConnell insisted for weeks that Republicans wouldn’t provide the votes to help Democrats lift the debt ceiling.

In a rare move, McConnell blinked first. Staring down a potential default, he made Democrats an offer: Republicans would provide Democrats with 10 votes to help reach the 60 votes needed to overcome a filibuster. But after that, he warned, Democrats would not be able to count on any GOP votes to raise the debt limit.

Several rank-and-file Republicans said McConnell’s offer was based in part on concern that a prolonged debt limit debate would crack some of the final Democratic holdouts opposed to abandoning the filibuster, such as Sens. Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona. Democrats had floated the idea of a small carve-out to waive the filibuster to address the debt limit only. That would open the door to a wider dismantling of the filibuster.

That wasn’t a strong enough reason for many Republicans. In a closed-door meeting shortly before the Senate vote last week, Republicans expressed frustration over the offer made to Senate Majority Leader Charles E. Schumer (D-N.Y.).

It was on full display during the Senate vote. McConnell and his leadership team provided a large chunk of the 11 GOP votes. The others came from moderates and the retiring senators, who are not vulnerable to the political consequences in an upcoming election.

“We were all standing together and making clear that Democrats had complete authority to raise the debt ceiling, and to take responsibility for the trillions of debt that they are irresponsibly adding to this country,” Sen. Ted Cruz (R-Texas) said. “We were winning that fight and Schumer was on the verge of surrender.”

After the Senate vote — as well as a speech by Schumer that Republicans viewed as an overtly partisan spike of the football — McConnell wrote in a letter to Biden that Republicans would not help lift the debt limit again.

“In light of Sen. Schumer’s hysterics and my grave concerns about the ways that another vast, reckless, partisan spending bill would hurt Americans and help China, I will not be a party to any future effort to mitigate the consequences of Democratic mismanagement,” McConnell wrote in a letter to Biden on Friday.

Congress periodically needs to raise the spending limit to pay for existing debt, which expanded significantly in the last few years.

Democrats’ position has been that they wouldn’t have time to raise the debt limit through reconciliation, a legislative process that takes several days. Their bigger concern has been setting the precedent that only one party is responsible for raising the debt limit, which until several years ago was just viewed as a basic function of governing. Republicans say they have now given Democrats plenty of time to set up the reconciliation process for the December debt lift.

“There aren’t any Republicans in my experience here who like dealing with the debt limit,” said Sen. John Thune (R-S.D.). “In this case, what we did is we took the Democrats’ main argument off the table, which is they didn’t have enough time. So this buys them some time.”

Democrats so far won’t say how they will lift the debt limit next time. House Speaker Nancy Pelosi (D-San Francisco) on Tuesday left the door open to supporting a bill that would allow the Treasury Department to raise the debt ceiling, while retaining power in Congress to overrule the Treasury secretary. “I do think it has merit,” Pelosi said of the idea, which has never been used.

But many Democrats expect McConnell to fold again in order to avoid a default. “For the next three months, we’ll continue to make it clear that we are ready to continue to vote to pay our bills and Republicans are not,” said Sen. Christopher S. Murphy (D-Conn.).

And some believe that months of debate over the debt limit will only bolster Democrats’ position that both parties need to be shepherds of Congress’ most basic functions.

“More time will only harden the Democrats in their belief that reconciliation should stay off the table [to raise the debt ceiling], and that by agreement or more aggressive action, they should be allowed to get this done through regular order,” Spahn said.