Raising the debt limit used to be routine in Washington, but over the years it has become more of a partisan battleground, resulting in perennial crises that threaten to undermine global faith in American markets and thrust the U.S. economy into recession.
The nation is weeks away from yet another such predicament. After raising the debt limit with days to spare earlier this month, Congress needs to act again on it before some point in December. And another partisan brawl is brewing over giving the Treasury Department the ability to pay for programs lawmakers have already authorized.
Given how predictable and potentially calamitous that gridlock is, it’s a wonder Congress hasn’t overhauled or removed the borrowing cap altogether.
There are ways to do just that, even though it isn’t likely before the next deadline. Important players on both sides of the aisle have proposed solutions. Treasury Secretary Janet Yellen and GOP leader Mitch McConnell have over the years supported dramatic rewrites to the debt limit.
Ten years ago, McConnell floated the idea of giving the president the responsibility of lifting the borrowing cap subject to congressional review. Last month, Yellen told the House that she would support a bill erasing the ceiling outright or granting the Treasury secretary power to reset it from time to time.
It might be time for Republicans and Democrats to review the possibilities. Without a measure to lift or suspend the debt limit, Treasury says it only has enough funds to pay the country’s bills through early December.
Ten years ago, McConnell floated the idea of giving the president the responsibility of lifting the borrowing cap subject to congressional review. Last month, Yellen told the House that she would support a bill erasing the ceiling outright or granting the Treasury secretary power to reset it from time to time.
It might be time for Republicans and Democrats to review the possibilities. Without a measure to lift or suspend the debt limit, Treasury says it only has enough funds to pay the country’s bills through early December.
Ditching the debt ceiling
One option is an outright repeal of the debt limit.
Yellen told House lawmakers in September that she supports a couple pieces of legislation that effectively cancel the borrowing limit in its current form. She noted Congress decides on taxes and spending, but should also provide better way to pay those obligations.
“If to finance those spending and tax decisions, it’s necessary to issue additional debt, I believe it’s very disruptive to put the president and myself, the Treasury secretary, in a situation where we might be unable to pay the bills that result from those past decisions,” she said on Sept. 30.
There are at least two similar bills in the current Congress that might appeal to Yellen.
Since Democrats campaigned on promises to overhaul the nation’s physical infrastructure and enact legislation on progressive priorities like climate change and poverty, that option isn’t realistic.
McConnell, meanwhile, has promised that all Republicans will oppose a debt-ceiling compromise since Democrats have opted to force much of their agenda through the Senate via reconciliation.
Democrats will then be forced to use reconciliation, a special process that allows bills to clear the Senate with a simple majority, to raise the debt ceiling in December.
While it’s their only realistic option, Democrats may not like the idea of passing a debt-ceiling increase via reconciliation since it would force the party to vote for a dollar-figure amount.
While Democrats have argued thus far that the debt limit is a bipartisan responsibility, House Speaker Nancy Pelosi signaled on Sunday that she’s open to Democrats acting alone through reconciliation.
“That’s one path. But we’re still hoping to have bipartisanship,” she said on CNN’s “State of the Union.”
