It has become the norm during a Democratic presidency: Republicans in Congress threaten to shut down the federal government or even allow the U.S. to default on its debts.
These threats used to be much rarer. For most of the 20th century, the raising of the debt ceiling and the funding of the federal government’s operations tended to be sleepy, technical subjects. Members of Congress would fight over how to spend money rather than the basic mechanics of enacting that spending.
The new era began in the 1990s, when Newt Gingrich, then the House speaker, tried to force Bill Clinton to cut Social Security and other programs. Although Gingrich failed, congressional Republicans adopted his tactics during Barack Obama’s presidency and did win significant cuts to domestic programs.
Now the pattern is repeating itself.
Republicans say they will not provide enough votes to lift the debt ceiling before the federal government hits its legal cap on borrowing next month. And because Democrats have packaged a debt-ceiling increase together with a bill to extend funding for the federal government beyond Sept. 30 (the end of the fiscal year), a possible government shutdown also looms.
The standoff could have ripple effects. Economists are worried the uncertainty could hurt financial markets, while Democrats — already facing a packed congressional agenda — now have yet another legislative problem to solve.
McConnell’s strategy …
This time, Republicans have a different goal than they did during the Clinton and Obama administrations. With Democrats controlling both the House and the Senate, Republicans recognize they cannot force spending cuts. Mitch McConnell, the Senate minority leader, is instead trying to force Democrats to lift the debt ceiling with no Republican help.
He hopes to make Democrats look fiscally irresponsible at the same time that they are also trying to pass a major spending bill that is the centerpiece of President Biden’s agenda. “This is a totally Democratic government,” McConnell said yesterday. “They have an obligation to raise the debt ceiling, and they will do it.”
McConnell’s argument conveniently omits a couple of relevant facts: A significant amount of the current debt stems from tax cuts and spending signed by Donald Trump and passed with Republican votes. And Congress needs to increase the debt ceiling even if Biden’s spending program fails.
On Tuesday, the Democratic-controlled House passed a bill to lift the debt limit through 2022 and fund the government through early December, as well as provide money for natural-disaster recovery and Afghan refugees. Senate Republicans appear likely to block that bill in coming days, by denying it the 60 votes needed to overcome a filibuster.
… and the Democratic response
How will Democrats respond? There is little chance that Democrats will let the government shut down or default on its debt, which could be devastating to the economy. One possibility is that Democrats and Republicans will together vote to keep the government open before the Sept. 30 deadline — and Democrats will then pass a debt-ceiling increase using a Senate technique that lets them bypass the filibuster and pass a bill with a straight majority. (The two parties each control 50 Senate seats, and Vice President Kamala Harris can break a tie.)
“We go through these gyrations every time,” Carl Hulse, The Times’s chief Washington correspondent, told us. “It usually comes right at the end, and it’s usually pretty messy.”
The party-line approach would have drawbacks for Democrats, but they may not have a choice. The legislative technique they would need to use, known as reconciliation, is time-consuming, making it harder for the party to pass Biden’s agenda. (Biden and congressional Democrats met yesterday, to see if they could overcome their internal divisions about that agenda.)
If it takes Democrats weeks to raise the debt ceiling and they approach the October deadline, even that could create economic problems. Debt ceiling brinkmanship in 2011 sent stocks tumbling, slowed economic growth and prompted analysts to downgrade the country’s credit rating for the first time.
“There is a big difference between avoiding default by months or minutes,” Janet Yellen, Biden’s Treasury secretary, wrote recently in The Wall Street Journal. “Neither delay nor default is tolerable.”
The potential silver lining for Democrats would be if Republican opposition to raising the debt ceiling unified congressional Democrats and helped them pass Biden’s bill to fight climate change, reduce poverty, expand education and health care, and more. It’s conceivable that Democratic leaders could incorporate the debt-ceiling increase into that larger bill.
The bottom line: This standoff reflects two major differences between the parties. One, Democrats tend to favor more government spending than Republicans. Two, the modern Republican Party is more tactically aggressive than it used to be — or than the Democratic Party is.
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