Senate Democrats appear increasingly ready to consider an exemption from the chamber’s filibuster rules to prevent a debt ceiling breach amid a stalemate with Republicans.
“Oh, I think that’s a real possibility,” President Joe Biden said Tuesday night at the White House after returning from a trip to Michigan.
At their closed-door policy lunch Tuesday, the caucus discussed potentially changing the rules to lower the cloture threshold to a simple majority in order to suspend the debt limit. That option gained momentum as senators maintained that they would not use the budget reconciliation process to pass a filibuster-proof debt ceiling increase given the length and complexity involved.
“We’re not doing it on reconciliation,” Sen. Tim Kaine, D-Va., said after the caucus lunch. When asked about changing the filibuster rules, however, Kaine wasn’t as adamant. “Talk to leadership,” he said. “But we’re resolved that we’re not going to allow the United States to default.”
Other Democrats sounded like they were warming to the idea.
“We have to do whatever it takes to get it done,” said Michigan Sen. Gary Peters. “We can’t let the country default because the Republicans don’t want to pay past bills.”
Senate Finance Chair Ron Wyden, whose panel has jurisdiction over debt limit legislation, wouldn’t rule out the option either, though he deferred to Majority Leader Charles E. Schumer to make any announcements.
“I’m gonna let Senator Schumer describe the procedure, but this just has to get done,” the Oregon Democrat said. “I’m not gonna get into what was discussed at the lunch . . . other than saying, this has got to get done.”
Treasury Secretary Janet L. Yellen has said Congress must act by Oct. 18 or the agency would be at risk of failure to meet U.S. financial commitments.
“It would be catastrophic to not pay the government’s bills,” Yellen told CNBC on Tuesday, arguing it could cause delays in Social Security checks for 50 million seniors, and in child tax credits for 30 million households. “I fully expect it would cause a recession as well.”
One of the chief Democratic obstacles to “going nuclear” in the past has been key centrist Joe Manchin III of West Virginia. On Tuesday he didn’t categorically reject the option of a one-time change in the filibuster rules for debt limit legislation, though he didn’t endorse it either.
“They gotta work through it,” Manchin said of Schumer and Minority Leader Mitch McConnell, R-Ky. “Let the leaders work it out.”
McConnell for months has been urging Democrats to use reconciliation to pass a debt limit bill. But at this point, the procedure could push a final vote fairly close to Oct. 18.
“I do not think it is possible on a timeline that would not jeopardize the full faith and credit of the United States. It would be the height of irresponsibility. We’re in the danger zone right now,” Sen. Mark Warner, D-Va., told reporters.
When asked later about the possibility of a filibuster carveout, Warner said “all options have gotta be on the table” and that “there’s lots of conversations going on.”
Democrats adopted a fiscal 2022 budget resolution in August that allows them to use the filibuster-proof procedure to pass a sweeping spending and tax package. They declined to include “instructions” for a reconciliation bill to raise the debt limit.
But Schumer earlier this year secured a parliamentary opinion enabling Democrats to reopen the budget blueprint and add more reconciliation instructions, including possibly for the debt ceiling.
While that process entails multiple procedural hoops — including a Senate Budget markup and votes on a revised budget in both chambers, followed by a markup and votes in both chambers on the reconciliation bill — some experts say it could feasibly be wrapped up within 10 days.
Some GOP senators appear willing to truncate the cumbersome reconciliation process to allow Democrats to raise the debt ceiling on their own before running into the Oct. 18 deadline.
Cruz said time agreements are commonplace and didn’t rule out GOP acquiescence in speeding up votes on a debt limit reconciliation bill.
“It would depend on the circumstance; we have all sorts of time agreements on all sorts of matters,” he said. “The only end place for this political theater is going to be complete surrender by Chuck Schumer and he knows this.”
Murkowski is one of a few Republicans who haven’t ruled out voting to suspend the debt ceiling. “I want to make sure that we are doing everything that we can to not send us into a situation of default, and I don’t even want to get close,” she said Tuesday, adding it was “a possibility” that the GOP would help expedite the reconciliation process.
“Again, what we’ve got to figure out is how we don’t come up against this limit and cause the anxiety that everyone is justifiably afraid of,” Murkowski said.
One issue for Democrats, however, is the language of the 1974 law that established the budget reconciliation process requires a dollar amount of added debt to be written into the legislation. Since 2013, Congress instead has simply suspended the debt limit, which lets lawmakers avoid voting on a specific dollar figure.
Sen. Ron Johnson, R-Wis., said Republicans would be willing to help speed up the reconciliation process if Democrats agreed to use it to raise the debt limit, but not for a suspension bill.
“If they’re just trying to suspend the debt ceiling, we’ll object to that,” he said.
Cloture vote Wednesday
Schumer on Monday night teed up House-passed legislation to suspend the debt limit through Dec. 16, 2022, for a Wednesday cloture vote.
“Let me say that again so all of my Republican colleagues can hear it and the American people can hear it loud and clear: Tomorrow’s vote is simply a cloture vote. Tomorrow’s vote is not a vote to raise the debt ceiling,” Schumer said on the floor Tuesday. “It’s, rather, a procedural step to let Democrats raise the debt ceiling on our own.”
For now, Republicans seem likely to block that measure from advancing given the 60-vote threshold. Once that occurs, it could be decision time for Democrats on next steps.
Schumer has been clear he doesn’t want to use reconciliation, though some other influential Democrats have declined to rule it out, including Manchin and Majority Whip Richard J. Durbin of Illinois
On Tuesday, Schumer again downplayed the reconciliation option but left himself a little wiggle room.
“Reconciliation is a drawn-out, convoluted process. We’ve shown the best way to go,” he said, referring to seeking consent from Republicans to drop the 60-vote cloture threshold. “We’re moving forward in that direction.”
Yellen on Tuesday avoided getting into the procedural debate playing out at the Capitol, but she stressed that Oct. 18 remains a deadline in her view. Some independent forecasters have said Treasury could make it several more days, while stressing the uncertainty of cash flows makes it difficult to predict.
“It’s really up to Speaker [Nancy] Pelosi and Leader Schumer to figure out how to get this done in Congress,” Yellen told CNBC. “What I can tell you is that it’s utterly essential that this be done, I’ve said that by the 18th of October we will be out of extraordinary measures, have limited cash and likely to be exhausted very quickly.”
Friday was a major drain on the Treasury as benefit payments for Social Security, Medicare, veterans and other programs went out, the agency reported.
Altogether, Treasury’s cash balance dropped by about $83 billion on Friday, or nearly 40 percent, with about $132 billion remaining. That’s not counting a separate $114 billion payment Treasury had to make on Friday to the Pentagon’s military retirement fund.
For the time being, there doesn’t appear to be anything Senate Republicans want in exchange for their votes on cloture. In 2015, 2018 and 2019, for example, the two parties compromised on discretionary spending caps with roughly equal increases in defense and nondefense programs, attaching those limits to debt ceiling suspensions.
This time, Senate Republicans aren’t entertaining that scenario. “Can I give you a short answer? No,” Sen. John Cornyn, R-Texas, said Tuesday.
“I think this is bigger than that, because of the COVID experience and spending all these trillions of dollars and adding to the national debt, which is aligned together with all these other spending programs fueling inflation and leading to undesirable policy outcomes,” Cornyn said. “So I think it’s a bigger issue than just parity on defense and domestic spending.”
Sen. Jeff Merkley, D-Ore., is a longtime proponent of eliminating the legislative filibuster. While he’s been unable to get traction within the caucus as a whole, Merkley said Tuesday that discussions have picked up given the debt limit impasse.
“There’s a lot more conversation because Mitch McConnell is threatening to blow up the economy by standing in the way of an ordinary process of holding a vote, and that’s an unacceptably dangerous thing to do,” Merkley said.
David Lerman and Lindsey McPherson contributed to this report.