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Debt Limit Crisis Punted to December

October 12, 2021

Senate leaders agreed to a short-term debt limit increase to avert a default crisis. The agreement lifts the nation’s debt limit by $480 billion and extends Treasury’s borrowing authority into early December. Government funding also expires on December 3, and the agreement creates a deadline to force Congress to again vote to increase the debt limit and again avoid another government shutdown in early December.

Rank-and-file Senators were unhappy with the outcome, which does “nothing to solve the debt ceiling problem long term for Americans,” writes Axios. And acrimony among Senators is unprecedented. Politico reported that after the vote, Democratic Leader Chuck Schumer gave a “fiery” speech dinging Republicans. A photo below shows centrist Senator Joe Manchin's (D-WV) obvious dismay at the tone of Schumer’s remarks who unloaded his frustration with Republicans. After the speech Politico reported “senators on both sides of the aisle approached [Schumer] to voice their displeasure” with the tone of Schumer’s remarks.

Republicans’ goal has been to force Democrats to pass a debt limit using reconciliation; the agreement is intended to give Democrats more time to use the arcane process. Republicans want to force Democrats to provide the dollar amount they want to spend (rather than a suspension of the limit), reduce the number of reconciliation bills that Democrats can use for other policy priorities on a party-line vote, and avoid putting Republican Senators on the record as supporting enormous government spending. The de-escalation by Republican Senate Leader Mitch McConnell came as it became increasingly clear that there was no easy way out of this stalemate, reported PunchBowl News. The outlet described three alternatives Senators were unwilling to pursue:

1. Republicans were not willing to end their filibuster of the debt limit.
2. Democrats did not have the votes to go “nuclear” and end the filibuster.
3. Democrats were not willing to use reconciliation because of time constraints.

Republican leaders hoped to avoid a roll call vote on cloture (a vote to close debate on a measure), but many Republican Senators held out and forced the procedural vote. The cloture vote succeeded 61-38, which allowed Democrats to vote to lift the debt ceiling 50-48. The following Republicans voted for cloture that allowed Democrats to lift the debt limit: Mitch McConnell (R-KY), John Barrasso (R-WY), Roy Blunt (R-MO), Richard Shelby (R-AL), Mike Rounds (R-SD), Shelley Moore Capito (R-WV), Susan Collins (R-ME), Lisa Murkowski (R-AK), John Thune (R-SD), John Cornyn (R-TX), and Rob Portman (R-OH).

The House is in a two-week recess but will return to DC on October 12 to pass the short-term debt limit increase. The legislation is formally called the “Senate Amendment to the House Amendment to S. 1301 – Temporary Extension of Public Debt Limit.” Politico provides this helpful three-minute video that explains why debt ceiling limits invariably produce political uncertainty. Why is legislating so difficult? A 50-50 Senate. Politico provides a deeper explanation of the current dynamics in the divided chamber.

Republicans’ goal has been to force Democrats to pass a debt limit using reconciliation; the agreement is intended to give Democrats more time to use the arcane process.

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