Top Democrats are privately discussing the possibility of using the budget reconciliation process in the upcoming lame-duck session to raise the statutory debt limit if Republicans retake one or both chambers in the midterms.
No decisions have been made, and the path to enacting another filibuster-proof budget bill in the short time allotted between Nov. 14 and Dec. 16, when lawmakers would like to wrap up the 117th Congress, is procedurally treacherous. And there’s a week off for Thanksgiving to boot.
But the motive would be to take the issue off the table before Republicans assume control in January and use a “must-pass” debt ceiling bill as leverage to try and extract spending cuts that are anathema to Democrats and the White House. “The idea is very much on the table,” a former Democratic aide familiar with the discussions said.
Current expectations are that the Treasury Department’s $31.4 trillion borrowing ceiling won’t really start to bite until the third quarter of 2023. Even though the debt subject to limit stood just $189 billion below the ceiling as of Friday, Treasury has a $600 billion-plus cash stockpile it can dip into plus “extraordinary measures” it typically employs such as suspending new civil service retirement fund investments.
But some Democrats advocate action well in advance to avoid putting President Joe Biden in a difficult position next year. Republicans are favored to win control of the House in the midterms, and recent polling suggests they also could gain a majority in the Senate.
House Minority Leader Kevin McCarthy, who’d likely become speaker if the House flips, in an interview with Breitbart News said if Republicans win back both chambers, they’d likely use reconciliation to try to send a spending-cuts bill to Biden’s desk.
Some conservatives have discussed changes to Social Security and Medicare, among other programs, which has become a major talking point for Biden and the Democrats in the midterm campaign. Top Republicans say they have no interest in cutting benefits for seniors, however.
Under the budget reconciliation process, lawmakers are allowed to pass three types of bills — to make changes to spending levels, revenue levels or the debt ceiling — either separately or combined into one.
A debt limit reconciliation bill could theoretically land on Biden’s desk after a roughly two-week process, and if Democrats remain united, it could pass with a simple majority without any concessions to Republicans.
Democrats would have to originate a new budget resolution for fiscal 2023 with instructions to raise the debt limit by a certain amount — some Democrats have advocated for an astronomical amount, to push off the next debt limit debate indefinitely.
That process could begin in either chamber, though the last two budget resolutions have originated in the Senate. Democrats could bring it straight to the floor in that chamber under “automatic discharge” rules since it’s well after an April 1 deadline for Senate Budget Committee action.
The resolution can’t be filibustered. There are up to 50 hours of Senate debate allowed, followed by a “vote-a-rama” of unlimited amendments.
Once the two chambers adopt the budget, House Ways and Means could report out the debt-limit bill followed by quick floor action, and then another 20 hours of Senate floor debate and vote-a-rama.
However, during the last debt limit debate in late 2021, Senate Republicans urged Democrats to go the reconciliation route, offering to yield back all of their floor time and put a lid on amendments offered during the vote-a-rama.
It would still be a tricky process, and likely eat into Senate floor time to confirm Biden’s outstanding nominees.
Accordingly, a lame-duck reconciliation bill may be more attractive if Democrats hold onto the Senate on Election Day, since they’d be able to confirm more Biden nominees next year. But one complicating factor is the Georgia Senate race, which is very close and may not be decided until a Dec. 6 runoff if neither incumbent Democrat Raphael Warnock nor GOP challenger Herschel Walker reaches 50 percent of the vote on Nov. 8.
But there’s time for reconciliation if the political will exists, people familiar with the process said.
“There’s definitely time to do it without even crowding the calendar,” the former Democratic aide said. “But that’s as much up to Republicans as anybody. Like always, where there’s a will, there’s a way.”
Reconciliation bills have been used to raise the debt limit four times — in 1986, 1990, 1993 and 1997 — but all were done as part of broader deficit reduction packages.
There was also an unsuccessful attempt: After gaining control of Congress in the 1994 midterms, Republicans sent then-President Bill Clinton a reconciliation bill that included a debt limit increase paired with enough spending cuts to balance the budget. He vetoed it.
Democrats resisted GOP calls last year to use reconciliation for debt-limit legislation after their $1.9 trillion pandemic relief package became law without a single Republican vote. Top Republicans said after that, Democrats were on their own regarding the debt ceiling and would have to come up with the votes themselves.
But the majority Democrats viewed reconciliation as too time-consuming, and ultimately they cut a convoluted deal with Senate Minority Leader Mitch McConnell.
They tucked a temporary exemption from the Senate’s filibuster rule for a debt ceiling bill into a broader package averting automatic cuts in Medicare and farm subsidies. Fourteen Senate Republicans voted for cloture on that measure. Later, no Senate Republicans voted for the stand-alone, $2.5 trillion debt limit increase measure that Biden signed last December.
Democrats again used reconciliation earlier this year for their mega climate, health care and tax increase package, which passed the Senate after a marathon weekend session in August.
The appetite for reconciliation in the lame-duck session will also be colored by a crush of other must-pass bills, including fiscal 2023 appropriations and the defense authorization act. Lawmakers are also looking at an “extenders” bill for expiring tax and health care provisions.
But while reconciliation remains unpalatable, and probably not the likeliest option at this point, the outcome of the midterms could change Democrats’ minds about whether to drag their members through the process all over again.