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Potential fallback for debt ceiling fraught with complications

If no other option is available, reopening the fiscal 2022 budget resolution to add debt limit language is possible

Getting a revised budget resolution out of the Senate Budget Committee, led by Vermont independent Bernie Sanders, might be a big challenge.
Getting a revised budget resolution out of the Senate Budget Committee, led by Vermont independent Bernie Sanders, might be a big challenge. (Tom Williams/CQ Roll Call)

ANALYSIS — Democratic leaders for weeks have denied they would potentially dust off the budget reconciliation process once again as a last resort to lift the statutory debt ceiling with a simple majority vote if they couldn’t find at least 10 Republican votes in the Senate.

Republicans, however, would like nothing more than for Democrats to carry the burden of raising the debt limit on their own, without GOP help. Because of the Senate’s arcane budget rules, a reconciliation bill would need to raise the debt ceiling to a specific dollar amount, rather than simply suspend it until a later date, which is considered a less politically fraught vote.

All the more reason Democrats don’t want to give Republicans the satisfaction of being able to use such a vote in midterm campaign ads. They’ve been hammering home that the debt limit is a shared, bipartisan responsibility.

[House passes stopgap funding, debt ceiling suspension bill]

But if there’s no other option available, reopening the fiscal 2022 budget resolution to add debt limit language is possible. It’s just complicated, it’s not clear the Senate parliamentarian would allow it, and time is short with estimates that the Treasury Department could run out of funds to meet U.S. financial commitments within weeks.

First, the Senate and House would have to adopt a revised fiscal 2022 budget resolution, known as a “section 304” resolution under that part of the 1974 budget law, with reconciliation instructions to raise the debt limit. Those instructions would allow Democrats to write a bill to raise the debt limit, which both chambers also would have to pass.

Both votes would only require a simple majority, allowing Vice President Kamala Harris to break the tie in the 50-50 Senate.

One outstanding question is timing: Democrats still haven’t passed their reconciliation package to implement the original fiscal 2022 budget instructions, allowing for up to $3.5 trillion in new spending and tax breaks, half of which must be offset.

If they don’t first pass that reconciliation bill, some question whether the adoption of a revised budget resolution might wipe out the majority’s ability to use the older reconciliation instructions for their current fiscal package.

No ‘auto-discharge’

Another big challenge might be getting a budget resolution out of the Senate Budget Committee.

Senate Parliamentarian Elizabeth MacDonough issued an opinion in May saying the “auto-discharge” procedure that has been used to allow the Senate to take up a budget resolution without it being reported out of committee “is not appropriate for a 304 resolution.”

In the Senate, if the Budget Committee has not reported a budget resolution by April 1, the deadline in budget law, one or more budget resolutions can be introduced after that date and automatically placed on the calendar. That’s the procedure that was used with the fiscal 2021 budget resolution in the Senate, avoiding the need for a committee markup.

MacDonough opined against using that procedure for a revised budget resolution, noting that a revised budget is an “optional procedure” and that there’s no deadline for reporting it out of committee or completing action on it in the Senate, so an auto-discharge isn’t appropriate.

Yet budget experts from both parties say a Senate rule for this Congress that allows bills to be discharged to the floor when there is a tie vote in committee would apply to a revised budget resolution.

[Debt limit options narrowing, 14th Amendment chatter returns]

Nevertheless, Republicans could prevent the budget resolution from being marked up in the Budget Committee by boycotting the hearing. That would prevent the panel from voting on the concurrent resolution, and therefore prevent the majority from using the discharge rule to put the measure on the Senate calendar.

Alternatively, if at least one Republican on the committee voted to report the budget resolution, it would go to the floor without a discharge procedure.

Senate Minority Leader Mitch McConnell said that Republicans are united in opposing a debt limit increase and that Democrats will have to use reconciliation to raise the borrowing ceiling. But whether Republicans would cooperate in allowing a revised budget resolution to go forward isn’t clear.

If the Senate Budget Committee did vote on a revised resolution and it was a tie, the measure could be discharged to the floor under a process that begins with Budget Chairman Bernie Sanders, I-Vt., sending a notice of the tie vote to the secretary of the Senate.

After that, Majority Leader Charles E. Schumer or McConnell could move to discharge the budget with debate limited to four hours. It would take a simple majority to discharge the budget and put it on the calendar. Since the Budget panel would have technically reported the measure out, even though it was a tie, a motion to proceed to the revised resolution would also require only a simple majority.

The revised budget resolution would then require up to 15 hours of Senate debate, unless one or both sides yielded back time, followed by a “vote-a-rama.” The reconciliation bill to implement the actual debt limit increase would then be allotted a maximum 20 hours of debate plus another vote-a-rama.

The House would, of course, have to also adopt the revised budget outline. That chamber has fewer procedural hoops to jump through, but some budget experts believe the House Ways and Means Committee would have to report out a debt ceiling bill before it passes the House. If not, it’s possible the measure could lose its reconciliation privilege under Senate rules and go right back to a 60-vote hurdle.

Taking a House-adopted budget revision directly to the Senate floor isn’t an option without going through the Senate Budget Committee, either. That’s been done before, but only under auto-discharge rules, which wouldn’t be applicable here.

Late October deadline

All these procedural steps are time-consuming, and Congress already has a lot on its plate and just weeks to suspend or raise the debt limit. One private sector forecaster, Wrightson ICAP, said this week that the Treasury Department could probably make it only until Oct. 26 before running out of cash and borrowing room.

Some knowledgeable sources well-versed in budget issues say the entire process could take about 10 days, give or take. That would theoretically be enough time, if Democratic leaders made the decision to move to a section 304 resolution.

They’re still holding out for GOP support, however, and placing the blame for any potential fiscal crisis at Republicans’ feet. But the next week or so — perhaps after the stopgap funding measure carrying a debt limit suspension is potentially blocked in the Senate — will be a key test of Democrats’ debt ceiling resolve.

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