Why Democrats Don't Want to Lift the Debt Ceiling Using Reconciliation

The debt ceiling issue has entangled Congress in yet more partisan gamesmanship.

The two sides agreed to an emergency extension into December, averting the immediate crisis, but Senate Minority Leader Mitch McConnell (R-KY) previously said Republicans will still insist that Democrats ultimately use reconciliation to lift the debt ceiling.

McConnell had previously dug in his heels, as he has often made clear he is abundantly happy to do. He told the Democrats they could not have Republican votes to lift the debt ceiling and to use reconciliation to avoid an unprecedented American default.

This new debt limit agreement pushes back the default threat by a couple of months. But McConnell has still essentially told Democrats: If you want it raising, raise it yourselves.

The debt ceiling limits the amount of debt the federal government can hold. To avoid a default on U.S. debt, Congress must authorize raising or suspending the limit so the country's financial obligations can be met. These debts relate to past spending, not new.

But the Democratic Party has already resorted to the reconciliation process under the Biden Administration because the Senate is so finely balanced and the filibuster is an obstacle to passing straightforward legislation with a simple majority.

The Senate is currently split 50-50 between the Democratic caucus and the Republicans, but Vice President Kamala Harris' tiebreaking vote gives the Democrats slight control.

Democrats used reconciliation—which, because of arcane congressional rules, only requires a simple majority to pass each item—for the American Rescue Plan earlier this year. So why the hesitancy this time?

The party insists that responsibility for raising the ceiling is bipartisan because it is about paying for the spending of administrations led by either party. It was a point made by White House Press Secretary Jen Psaki at a briefing on October 5.

"Why let McConnell off the hook or Republicans off the hook? I mean, this is their debt that they chalked up themselves," Psaki said.

"This is a period of time where we could easily solve this in the next two days and easily do that through allowing Democrats to be the adult in the room, despite the fact that Republicans spent like drunken sailors over the last four years before President Biden took office."

Biden also placed responsibility for the impasse on the Republicans and pointed to the Democrats having supporting debt limit extensions under former President Donald Trump.

"Republicans in Congress raised the debt three times when Donald Trump was president, and each time with Democrats' support," Biden said on October 4. "But now they won't raise it even though they're responsible for more than $8 trillion in bills incurred in four years under the previous administration."

The GOP is leaning into the advantages of being out of power. Should there be a disastrous default, Republicans may face some criticism, but the crisis would easily be framed as a failure of Democratic leadership.

Democratic leaders have insisted they will not let America default, and the White House has made it clear all options are open, so reconciliation is not written off entirely; a tacit acceptance that raising the ceiling is within their power.

Legislation Democrats hoped to pass, which was signed off by the Democratic-controlled House, would have suspended the nation's borrowing limit until the end of next year. But in lifting the ceiling through reconciliation, Democrats would have to put a number on the new limit for national debt rather than suspending it for a period of time.

Fixing a number would hand Republicans campaign ammunition ahead of the 2022 midterms. The Republicans have heavily criticized Democratic spending, and this would be another means of framing their rivals as fiscally irresponsible.

"If Mitch McConnell wants the Democrats to use the budget reconciliation process to solve the debt ceiling crisis, you know he thinks that's a win for Republicans and a loss for Democrats," Andrew Wroe, senior lecturer in American politics at the University of Kent, told Newsweek.

"Why? Because the Democrats would own the problem completely and McConnell could blame them for recklessly spending hardworking Americans' tax dollars.

"Further, with such small majorities in both chambers of Congress, the Democratic Party's internal politics would be incendiary, with divisions between moderates and progressives made public, and individual members throwing tantrums to get pet projects inserted into the reconciliation bill as a trade-off for their support.

"The party's internal divisions are already evident over the trillion dollar infrastructure and social policy bills. They would explode over a reconciliation bill."

While McConnell may have "backed down for now," with the extension offer, Wroe believes he will still try to tie the ceiling rise to the Democrats: "He'll continue to do everything he can to make the Democrats own it—most obviously via their budget bill."

Beyond the political maneuvering, there are practical issues surrounding reconciliation. One is time. To raise the ceiling through reconciliation ahead of October 18—the estimated date of default—would have required the fastest passage of such a bill in U.S. history. While the delay helps avoid this rush, using the reconciliation process down the line would still eat up precious time that could be used on other legislative priorities.

Amending the Senate's already passed budget resolution for the $3.5 trillion special spending bill, which Democrats aim to pass through reconciliation, may also prove a drawn-out process, as could a new standalone measure addressing the ceiling.

"To do this through reconciliation requires ping-ponging separate bills back from the Senate and the House. It's uncharted waters," Senate Majority Leader Chuck Schumer (D-NY) said on the floor on September 29.

"Individual senators could move to delay and delay and delay. It is very risky and could well lead us to default, even if only one senator wanted that to happen."

McConnell has said the Republicans would expedite a reconciliation process down the line, but there is deep mistrust between the aisles.

Michele Swers, a professor of American government at Georgetown University, wrote in a blog for the London School of Economics' USAPP: "Requiring Democrats to utilize reconciliation consumes limited floor time in the Senate, preventing Democrats from moving forward on their agenda.

"It also provokes more internal turmoil within the Democratic Party, undermines President Biden's agenda, and allows Republicans to portray Democrats as tax and spend liberals."

With the threat of crisis looming, the debate has raised questions over the wider process of setting the debt limit.

John Owens, a professor of U.S. government and politics at the University of Westminster, told Newsweek: "Let's start with basics. It is ridiculous that the legislature in any political system decides its country's debt limit—let alone one that has such an important influence on the global economy and one where a default risks a global financial crisis, higher interest rates, and increased unemployment."

Owens suggested it would be rational for "the Congress to abolish the debt ceiling it regularly approved and allow the Treasury to make borrowing decisions to pay its bills."

"This is not likely to happen because congressional Republicans and a sufficient number of Democrats would not support such a move, and the Biden administration is unlikely to take unilateral action," Owens said.

Justin Buchler, associate professor at Case Western Reserve University's Department of Political Science, told Newsweek he thinks Democrats should have considered eliminating the debt ceiling prior to this point.

"In my assessment, the Democrats' first policy priority should have been not raising, but eliminating the debt ceiling altogether," Buchler said, insisting that the Republicans' position on the matter has been predictable.

"To let it get to the brink is just plain stupid. The Democrats have been wasting their time with internecine warfare over new spending bills with financial disaster looming and no plan to avoid it.

"This is political malpractice of the highest order, malice in the case of Republicans, and short-sightedness in the case of Democrats."

chuck schumer speaks after weekly luncheon
Senate Majority Leader Sen. Chuck Schumer (D-NY) speaks to members of the press after a weekly Senate Democratic policy luncheon at the U.S. Capitol October 5, 2021 in Washington, D.C. He has previously spoken against the prospect of raising the debt ceiling through reconciliation. Alex Wong/Getty Images