Sides signal standoff on raising debt cap
WASHINGTON — The White House on Thursday signaled little appetite for Senate Republicans’ early insistence that Congress should couple an increase in the country’s debt ceiling with either spending cuts or reductions of entitlement programs like Social Security and Medicare, hoping to ward off a major political showdown entering the summer.
A White House official, speaking on condition of anonymity, said President Joe Biden “fully expects that Congress will meet its obligations as it did on a bipartisan basis three times during the Trump Administration and amend the debt limit law as needed.”
Under President Donald Trump, Republicans largely abandoned their zeal for austerity and endorsed a series of spending increases, including approving more than $3 trillion in 2020 alone to address the economic and health toll of the coronavirus pandemic.
The early warning that Senate Republicans are trying to reclaim the mantle of fiscal conservatism occurred a day after they gathered to adopt their conference’s guiding rules for this session. Unanimously, they agreed to a nonbinding yet symbolic statement that they would not raise the debt ceiling unless lawmakers also cut by a similar amount.
Senate Republicans agreed to stake the position at the request of Sen. Rick Scott of Florida, who regularly has joined other Republicans in blasting Biden and his Democratic allies for seeking major spending increases.
“I certainly hope that every member of the Republican conference complies with what the conference rules say,” said Sen. Ted Cruz, R-Texas.
However, Sen. John Cornyn, R-Texas, told reporters that the resolution was “aspirational.”
The debt ceiling is the amount of money the U.S. government can borrow to finance its obligations. Congress suspended the limit through June, at which point lawmakers must vote to suspend it again or raise the amount — or eventually risk an unprecedented default that would carry catastrophic consequences for the global economy.
Under Trump, Republican lawmakers did not demand spending cuts as they raised the debt ceiling several times, even as the former president shelled out large sums to fund his priorities, including the military. But the GOP historically has sought to use the debt as leverage in political fights against Democrats, at one point putting the country at risk of default under former President Barack Obama in order to secure a decade of caps on domestic spending.
Fearing a return to those fights, Democratic Sen. Ron Wyden of Oregon on Wednesday blasted Republicans for trying to hold the debt ceiling “hostage.”
“This is a page from the Obama-era economic sabotage playbook, and I’m not going to let Republicans play games with the economy for their political benefit,” he said in a statement.
To avert a showdown, Democrats may have at their disposal a budget process known as reconciliation that could allow them to raise the debt ceiling with only 51 votes. But some of the party’s members have expressed reticence to use reconciliation too often. The process also would not allow Democrats to suspend it outright, much as they did two years ago, according to Senate aides.
If Republicans refused to raise the debt ceiling, many economists have warned that it could lead to an economic crisis because confidence in U.S. government debt could plummet. In 2020, the government ran a $3.1 trillion deficit, meaning it spent $3.1 trillion more than it brought in through revenue. It made up the difference by issuing debt and borrowing. If it cannot borrow more, the government would be unable to pay all its bills.