5 ways to save the economy and raise the debt ceiling
But Congress is tied up in knots.
Republicans see a political advantage in standing in the way of raising the debt limit and are trying, somewhat disingenuously, to make a political point. Democrats have stubbornly rejected the one parliamentary avenue available to them.
It’s a totally normal snafu, except the stakes are the full faith and credit of the US and the stability of the US economy.
There are a growing number of creative solutions being thrown around as the parties stick to their guns and tempt economic calamity. Here’s a look at the options from completely insane to very likely.
Congress likely can’t afford to wait until October 18 to raise the debt ceiling. Here’s why.
If a default did occur, it is expected to be financially catastrophic. It could halt paychecks to federal workers, Medicare benefits, military salaries, tax refunds, Social Security checks and payments to federal contractors.
Bipartisan agreement. Ha! I’m listing this as the most fanciful, most unbelievable, least likely way to pay the nation’s debts because that’s the partisan space we’re in at the moment. Bipartisan agreement is the way Capitol Hill should work. But Capitol Hill doesn’t work right now. Republicans could simply allow an up or down vote by Democrats. A few Republicans could even join in. That seems very unlikely since, despite the stakes for the economy, the party has decided to focus on this moment to make its political point. It’s a little more complicated than that, and Democrats could certainly try to push a simple proposal to raise the debt limit. But everyone is very dug into their positions.
One-time suspension of the filibuster. Republicans have painted Democrats into a procedural corner. They’ve promised to filibuster attempts to raise the debt ceiling by requiring 60 votes to limit debate. One idea is to set aside the filibuster by changing the Senate rules for this one vote. It would allow Democrats an end run around the GOP obstruction to raise the debt ceiling on their own.
Biden, who served decades as a senator and has been loathe to get rid of the filibuster, said a one-time suspension is “a real possibility.”
What makes it unlikely is there are a number of Democrats, like Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona, who oppose ending the filibuster. Where they stand on this one-time idea to save the economy is not clear. The truth of the matter is that once somebody ends the filibuster for one thing, it’s going to be a short while before it’s gone for everything. From that perspective, the filibuster has been on borrowed time since Democrats ended its use for executive nominations and Republicans nuked it for Supreme Court nominations.
Manchin raised eyebrows when he did not completely dismiss the idea of a one-time filibuster exception after a meeting with Democrats on Tuesday.
“The leadership has got to get together and work this out for the sake of this country,” Manchin said.
Use the 14th Amendment. This is in the same vein as the $1 trillion coin, but without the cheekiness of a commemorative coin and with the weight of a reinterpretation of the Constitution behind it. It’s an expansive view of executive power that Republicans would encourage in a Republican president, but will challenge if Biden does it.
Here’s what the 14th Amendment says about debt in Section 4:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
The debt we’re talking about here has already been authorized by law in the form of tax cuts and spending bills, right? Previously, Congress has been called on to raise the debt ceiling with laws. So this would be a complete reinterpretation. Courts would undoubtedly be asked to weigh in. But not until Biden issues an order to suspend the debt. The closer we get to October 17, the more attractive this will be.
Budget reconciliation. This is the most discussed path, so that could make it most likely. It’s what Democrats don’t want to do, and while they are in the majority, reconciliation is what McConnell has pushed. As long as he keeps Republicans united, that gives this path the edge.
The irony of using a process meant to keep spending under control to increase US borrowing capability should be lost on no one. Budget reconciliation has become the go-to method for major and expensive legislation — GOP tax cuts, the Affordable Care Act and Democrats’ Covid relief bill were all passed using budget reconciliation.
Congress created this pathway to exempt the budget from the filibuster. Lawmakers from both parties are exploiting that loophole more and more. The problem for Democrats is they’ve already bookmarked budget reconciliation as the only way to pass a large new series of social safety net programs.
