Maybe the Debt Ceiling Thing Will Be Fine Next Year
We could be in for a repeat of 2011. But it could also be more like 2014.
Next year, we’ll shift from a Democratic trifecta (Democratic control of the White House and both houses of Congress) to a situation where Democrats control the White House and the Senate, and Republicans control the House. The last time we experienced this exact shift was in 2011, and so understandably a lot of people are preparing for a repeat of 2011’s politics, which included a high-stakes budget showdown where Republicans sought (and obtained) large spending cuts in exchange for raising the debt limit.
It’s not just Democrats who expect this — some Republicans, including #2 Senate Republican John Thune, have been getting explicit. Thune has suggested that Republicans could leverage debt ceiling negotiations to obtain caps on federal spending similar to the ones that were imposed in 2011, or in order to seek cost-cutting reforms to entitlement programs like Social Security and Medicare. Bloomberg News reported earlier this week:
On spending, lawmakers could seek bipartisan accord on a deal placing new spending caps on the programs under Congress’s discretion similar to the 2011 deal that ended the debt-ceiling showdown, Thune said. That agreement allowed the debt limit to be increased by up to $2.4 trillion in two installments, and it was coupled with caps on discretionary spending, saving more than $2 trillion over 10 years.
On entitlement program changes, Thune said Congress should weigh an increase in the Social Security retirement age. But he didn’t rule out a deal that might simply start the process of making key changes, pointing to a proposal by GOP Senator Mitt Romney and others for a task force to examine what needs to be done.
So it sounds like we might have another high-stakes debt limit fight. Yet there’s one thing Democrats could be — but aren’t — doing to prepare for this eventuality. If they were willing to invest significant floor time in Congress and take some political hits, they could raise the debt limit before Republicans take the majority, and they wouldn’t need any Republican votes to do it. While they cannot muster 60 votes in the Senate, they could use the budget reconciliation process to pass one more fiscal bill by a simple majority, and they could include a debt limit increase in that bill.
That said, it’s not really that puzzling why Democrats wouldn’t want to do this. Moving a new reconciliation bill to raise the debt limit would eat up a lot of time on the floor of both houses, interfering with other agenda items they’d like to pursue in the lame duck session, including (ideally) settling debates about what money the government will spend this fiscal year; then, Democrats would have to take all the political responsibility for raising the debt limit and for the borrowing that would ensue, because they’d be providing all the votes. Reconciliation rules might mean they would have to raise the debt limit by a specific dollar figure, rather than suspending it for a period of time, as Congress has recently tended to prefer — setting a dollar amount could sharpen the political attacks Democrats would face, since Republicans would be able to say exactly how many billions or trillions of dollars they had agreed to borrow. And a partisan, lame-duck debt limit increase through reconciliation is simply not how these things have ordinarily been done — normally, when there is divided government, there are bipartisan agreements to raise the debt limit, often in conjunction with bipartisan agreements about how much money the government will spend and on what.
Oh, and there’s one more reason not to act now: Democrats would like to have a fight with Republicans about whether to cut Social Security.
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