Politico

Democrats agonize over shutdown, debt limit game plan


House Democratic leaders were still wrestling Monday with a strategy to avoid a government shutdown and debt default, potentially delaying the release of a stopgap funding bill needed to keep federal agencies open.

The release of their short-term spending bill — initially slated to debut Monday — may slip by one day, according to people familiar with the discussions. Speaker Nancy Pelosi and her leadership team were expected to pair the two must-pass measures in an attempt to ratchet up pressure on GOP leaders, who have adamantly opposed voting to raise the debt limit. But the plan as of Monday morning remained unclear, as House lawmakers returned to Washington for the first time in roughly a month to tackle a sprawling legislative to-do list.

Republican leaders have sternly warned their Democratic counterparts that they will refuse to cooperate on any bipartisan plan to neutralize the looming crisis over the nation’s debt limit. Still, senior Democrats have been so far unwilling to acknowledge an alternative that doesn’t require GOP votes.

The majority party is eyeing a stopgap spending bill through Dec. 10, with Dec. 3 as another possible option, including billions of dollars in relief for hurricane-battered red states across the Southeast and funding to help Afghan allies and partners. They’ll have to pass some sort of spending measure by Sept. 30, otherwise the federal government will shut down. Some Republicans have said they’re willing to back a continuing resolution with that extra aid — as long as Democrats drop their debt limit dare, which would mean ceding a major point of leverage.

“The debt limit is a shared responsibility, and I urge Congress to come together, in that spirit, on a bipartisan basis as it has in the past to protect the full faith and credit of the United States,” Pelosi wrote in a letter to members on Sunday.

Senate Republicans were circulating a clip of House Budget Chair John Yarmuth on Monday, which showed the Kentucky Democrat noting on MSNBC that Democrats can use the reconciliation process to raise the debt ceiling on their own, while passing trillions of dollars in party policy priorities without GOP support.

“Well, ultimately they’re going to have to vote for it or we’re going to have to have a vote and do it by ourselves,” Yarmuth said in the television interview. “We can do it through reconciliation. Leadership has said they don’t want to do that. The reason is, if we do that through reconciliation, we have to specify a number. That only leads to further chaos in a certain period of time.”

Republican leaders have insisted for months that Democrats control Congress and the White House, and therefore have the power to stave off a debt default on their own. But with such slim majorities in the House and Senate, many centrist Democrats aren’t comfortable with unilaterally owning an upfront increase in how much money the government can borrow — likely the only action allowed by the special budget maneuver that the party is using to pass President Joe Biden’s social spending bill.

Instead, Democrats and the White House prefer a bipartisan debt limit suspension, which is akin to hitting pause on the critical issue. Both parties have been more apt to back a suspension in recent years, most recently in August 2019, when the Trump administration, Pelosi and then-Senate Majority Leader Mitch McConnell agreed to waive the debt ceiling for two years.

Democrats have argued that Republicans are abandoning responsibility when it comes to the $22 trillion federal debt, which both parties have racked up, leaving Democrats to wrestle with a typically bipartisan issue.

“I absolutely believe Republicans should be a part of acknowledging how much they drove up the national debt,” said Rep. Pramila Jayapal (D-Wash.).

Republican fiscal hawks are reveling in the majority party’s indecision.

“This is gonna be a ball. I’m going to have so much fun,” Sen. Rick Scott (R-Fla.) said about the convergence of fiscal cliffs. “They don’t have to negotiate. They have the House, the Senate and the White House. … They don’t have to talk to us.”

Treasury Secretary Janet Yellen has warned that her agency could run out of money as soon as next month, while other experts have estimated that Congress has until mid-November to act. Failing to raise the debt ceiling would create unparalleled economic chaos, roil financial markets, endanger the country’s credit rating, raise interest rates and more.

Yarmuth said he would rather raise the debt limit to an “extraordinarily large amount that we’ll never reach,” so that Congress can avoid the political brinkmanship that often surrounds the debt ceiling every few years.

“But that’s probably not viable politically,” Yarmuth said on MSNBC.

Jennifer Scholtes contributed to this report.

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