One party or the other is going to have to blink in the debt ceiling standoff. The question is when.
Washington’s frozen negotiations over the imminent breach of the nation’s borrowing limit thawed for the first time in months Monday night as the four top congressional leaders agreed to meet with President Joe Biden next week. Yet after senators held their party leadership meetings with the House out of town, it quickly became clear that Congress is not at all prepared for the new early-June deadline imposed by Treasury Secretary Janet Yellen.
The House and Senate are scheduled to be in session simultaneously for just two weeks this month. And with potentially less than 30 days to get the job done, Senate Democrats are now openly discussing the prospect of bringing a clean debt ceiling increase to the floor — effectively daring the GOP to either buckle and advance the bill or filibuster it.
Senate Majority Leader Chuck Schumer (D-N.Y.) and other Democrats have crafted a proposal to extend the debt limit through next year’s election. They aren’t ready to call that play on the Senate floor quite yet, given the very real possibility that a Republican filibuster of that debt hike could send economic forecasters into a downward spiral. Instead, the chamber is focusing this week on judicial picks.
In an ominous sign for House Republicans who are refusing to budge, several senators in President Joe Biden’s party predicted that Congress ends up passing a clean debt hike or “something close” to clean, in the words of Sen. Angus King (I-Maine), who caucuses with Democrats. Some Democrats signaled they’d be willing to make significant spending concessions — but only after the debt ceiling drama is solved.
“We should pass a clean debt ceiling and then we should figure out a path forward so we aren’t doing this every year,” said Sen. Jon Tester (D-Mont.), who faces a difficult reelection campaign, “I would like to see it done by figuring out ways that we can reduce the deficit and reduce the debt for a long term. And, quite frankly, get to a point where we have a balanced budget.”
Yet Senate Republicans are still not backing away from Speaker Kevin McCarthy’s negotiating position. They support his hardline tactic as the GOP’s opening bid to avoid default — driving negotiations with Biden by passing a conservative wish list — and are aware that any move 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, replied that “I’m supporting the House provision.”
“We should get out of the way in the Senate and just let Biden and McCarthy cut a deal. It should be somewhat encouraging that Biden has now decided to get off the couch,” said Sen. John Cornyn (R-Texas), an ally of Senate Minority Leader Mitch McConnell. “It’s not going to be a clean debt ceiling increase.”
Of course, Senate Republicans have said that before and twice buckled in 2021, lifting the debt limit with no strings attached. Clearly Schumer sees the same possibility: He spoke to Biden about a “clean” debt ceiling increase on Monday, according to a spokesperson, and put out a joint statement with House Minority Leader Hakeem Jeffries (D-N.Y.) calling for a debt increase without concessions.
But with McCarthy leading the House, conditions are less favorable for that type of result. And several dealmaking GOP senators who provided key debt-ceiling votes last Congress have retired, replaced by more conservative members.
Putting a finer point on it, Sen. Lindsey Graham (R-S.C.) said: “I don’t think there’s 10 Republican votes to undercut Kevin McCarthy.”
Those factors have forced the Senate GOP in lockstep behind McCarthy, who passed a debt ceiling increase last week that includes repeal of major Democratic priorities and blunt spending cuts.
Asked if it’s a good thing that GOP leaders are meeting with Biden, conservative Sen. Ron Johnson (R-Wis.) chuckled and said he’d take a positive view on it for now: “Maybe this is progress. We’re going to be urging Majority Leader Schumer to put the House bill on the floor.”
Some Democrats say they’d be fine with that. Sen. Tim Kaine (D-Va.) said he’d “feel very comfortable” voting down McCarthy’s bill to show it can’t pass the Senate.
A failed vote on a clean debt ceiling hike might be less palatable to Republicans who could be painted as obstructionist by Biden’s camp. Cornyn said the Senate should not take that route: “I don’t think it helps 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 that rely on them. His allies said the party is not backing off its position: A clean debt ceiling increase is the precursor to negotiations.
Baked into both parties’ moods are memories of 2011, when Democrats winced as debt ceiling talks with the House GOP resulted in a higher borrowing limit but, eventually, blunt budget cuts.
“The Senate should vote for a clean debt ceiling. And we should have 100 votes in favor of that,” said Sen. Elizabeth Warren (D-Mass.), who serves on Schumer’s leadership team.
Crises have a way of scrambling fixed positions, however. Yellen’s warning of the impending deadline arrived just after markets closed on Monday, and a month is a long time in Congress. Already there are whispers about canceling the next congressional recesses 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 U.S. could default sometime between July and September, agreed with Yellen on Monday that there’s a “significantly greater risk” 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.
Yet for now, 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 (R-W.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’s in their court,” she said about Democrats.
Daniella Diaz contributed to this report.