1) Democrats have the votes to do it on their own.
2) They really don’t want to do that.
In support of No. 2, Democrats have moved to tie the debt ceiling bill to a government funding resolution. The Democratic-controlled House passed it on Tuesday night although it appears DOA in the Senate.
The bigger question here is why. Why aren’t Democrats willing to use the House and Senate majorities to raise the debt ceiling, knowing that defaulting on our debts, which Treasury Secretary Janet Yellen has warned could come as soon as mid-October, could have catastrophic impacts on an economy still struggling to recover from the global pandemic?
Wrote Yellen in an op-ed for the Wall Street Journal on Sunday:
“In a matter of days, millions of Americans could be strapped for cash. We could see indefinite delays in critical payments. Nearly 50 million seniors could stop receiving Social Security checks for a time. Troops could go unpaid. Millions of families who rely on the monthly child tax credit could see delays. America, in short, would default on its obligations.”
Which is bad! Really bad!
So why not go ahead and suspend or raise the limit on their own to avoid that sort of catastrophe? Politics, of course.
See, the debt limit has become a political football in recent years. (There was a time when raising the debt limit was pro forma and non-partisan, but those days are long gone.) And the partisanship of it is based on a simple misunderstanding. Raising the debt limit sounds like you are OKing future spending by the federal government, a sort of blank check that many Americans, Republicans and Democrats, are not big fans of.
But that’s not actually what the debt limit does. Instead, it pays for spending the federal government already does. It’s more of a credit card payment than a blank check.
Which is why Democrats don’t want to go it alone on the debt limit suspension or increase. Because many of the past bills that this increase would pay for are tied directly to tax cuts that former President Donald Trump and a Republican-led Congress pushed through.
In Democrats’ minds, then, they would be getting all the worst parts of raising or suspending the debt ceiling with none of the benefits. They would be handing Republicans a ready-made campaign ad — albeit one entirely based on the misunderstanding I mentioned — while also paying off the debt rung up by Donald Trump.
And they are entirely right! Republicans — including Senate Minority Leader Mitch McConnell — have voted to raise the debt limit many times in the past, casting it as a necessary move in order to preserve the full faith and credit of the US economy. They are only refusing to do so now because Democrats are in the majority and they know they have them over the political barrel.
It’s politics taking precedence over sound policy. And it’s a very bad look.