The debt ceiling is one of those classic Washington issues: Not many people understand it. (The concept isn’t complicated, just boring.) And most of the time, no one gives a flying frog about it—including Congress. (Pondering long-term debt tends to mess with members’ spending and/or tax-cutting plans.)
But every so often, the U.S. Treasury hits its congressionally set borrowing limit, compelling lawmakers to raise that limit lest the nation default on its obligations, which would send America’s credit rating down the toilet and potentially spark a global financial meltdown.
And just like that, the debt ceiling becomes Beyoncé-hot, with everyone and their grandma expressing passionately held views about what must be done about it. Or not done. Or done and then redone.
Currently, Congress is in one of those waiting-to-redo periods. Earlier this month, to Republicans’ dismay, Donald Trump hopped into bed with Hill Democrats, embracing a deal to extend the debt-ceiling a mere three months. This has set up lawmakers for a high-stakes, highly charged showdown come December—making the holiday season super exciting for members already jittery about next year’s midterms.
Even more ominous for Republicans, while kicking it with his new pals “Chuck and Nancy,” Trump expressed an openness to repealing the debt ceiling altogether. Minority Leader Chuck Schumer was all in favor of exploring the possibilities. Hill Democrats promptly seized the moment to stir up a little legislative mischief.
On September 19, Senator Brian Schatz of Hawaii introduced a bill to kill the debt ceiling. “Paying our debts should be an automatic act, not a politicized weapon used for leverage,” he said in a statement. “It’s clear that the debt ceiling is not about fiscal responsibility, but about unnecessary brinksmanship.”
Schatz’s co-sponsors offered similar assessments. “Debt-limit showdowns have become far too routine, and it’s now considered almost normal to threaten default,” said Delaware Senator Chris Coons.
Colorado’s Michael Bennet, meanwhile, cheered: “This is an opportunity for Republicans and Democrats to work together to prevent manufactured crises and lift the threat of default off our economy for good.”
This, of course, is precisely why leadership has no intention of nixing the debt ceiling. Manufactured crises and political grandstanding have become central to modern (non-)governance. As House Speaker Paul Ryan said on Fox News recently:
As ugly and uncomfortable as the debt limit is—can become—I’ve found it to be a useful tool as a check on fiscal policy to help us get smaller government, to help us get some good fiscal conservative policy done. So it’s something that we have found is a good speed bump in the road to big government that we want to use to actually, you know, get good policy done.
As for Mitch McConnell, word around the Hill is that the Senate majority leader personally isn’t much of a debt-ceiling fan. But when asked about repeal, he retreats into cautious legispeak about the political realities: “Getting Congress to give up a tool like that would probably be quite a challenging undertaking,” he observed at a September 12 press conference. “My assumption is that the debt ceiling will continue.”
Democrats are not naïve. They acknowledge that Schatz’s bill is unlikely to move as-is any time soon—if ever. Even so, they’re hoping to accomplish a couple of things with it.
For starters, a Democratic Senate aide told me, they want “to remind everyone that this is a self-inflicted wound” and get people comfortable talking about the possibility of repeal so it’s not considered some sort of “third rail.” Managing the debt does not need to be this way, the aide stressed.
(Repeal fans point out that the United States is one of only two nations with a statutory debt ceiling. The other is Denmark, which has the good sense to set its limit so high that it can basically be ignored.)
Admittedly, backing a straight-up repeal could be politically untenable for Republicans. (These days, any vote that can be spun as pro-government risks getting one denounced as a RINO and primaried from the right.) But, as the Democratic aide noted, there are ways to tinker with the system to “take away the politically toxic moment of having to vote to increase the debt limit.”
Just three years ago, in fact, frustrated House Republicans toyed with the idea of resurrecting the Gephardt Rule (named for its author, former Representative Richard Gephardt). Under this rule, raising the debt ceiling did not require a separate vote by the House; instead, when a budget resolution was passed, the debt limit was deemed “automatically engrossed” to accommodate new spending levels. As Gephardt then noted, this put debt discussion “where it legitimately and logically belongs. That is in the context of when we vote for the spending that creates the need to change the debt ceiling.”
The Gephardt rule was used off and on, with occasional tweaks and suspensions, from 1980 until its repeal in 2011. Whether or not it could be revived (as has occurred in the past), Hill folks point to it as proof that alternatives to the current freakshow are possible.
This new bill, a senior Democratic aide told me, is “starting the conversation about how to do it if we are able to do it in December.”
Certainly this is not the first time lawmakers have toyed with repeal. In 2013, a handful of House Democrats introduced legislation to do away with the debt ceiling, making all the same noises about how the vote had been “weaponized” for political purposes. That effort went exactly nowhere.
But now Donald Trump has Democrats raring to revisit the issue.
“It’s a very different situation when you have a president willing to go out and say things like, “Yeah, let’s get rid of it,” said a Senate Democratic staffer.
If the December debt-ceiling negotiations get hairy, said the staffer, who’s to say Trump won’t make another impromptu pact with the minority? “The president has shown a willingness on big things to make a deal with Chuck and Nancy,” the staffer reasoned. “Something could happen between the White House and congressional leadership, and Trump just goes, ‘Screw it, yeah, I’ll do that!’”
Unlikely? Sure. But in these topsy-turvy political times, it pays to be prepared, say Democrats. “Let’s say there’s an off chance that, in some must-pass package, a debt-ceiling repeal can be part of it,” said the staffer. “You’re much better off having legislative language already in the can.”
At the very least, Democrats want to be on record as trying to address what has become a high-profile sign of congressional dysfunction. That way, if things blow up in December, they can throw even more blame at Republicans. “As with a lot of things in Congress, bills can be markers,” said the staffer. “This is one step in the weird way that Washington works to say that we’re starting to take it seriously.”
Heck, even if all of this goes nowhere, Schatz’s bill, and any discussion stemming from it, is an annoying reminder to Republicans that their president publicly sided with opposition leaders on this issue.
That has to make Chuck and Nancy smile just a little.
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