WASHINGTON — House Democrats are considering passing a separate bill as early as this week to lift the debt ceiling, as Treasury Secretary Janet L. Yellen warned the government might not be able to pay all its bills on time after Oct. 18.
One day after Senate Republicans blocked a stopgap funding measure that included a debt limit suspension, House Democrats discussed the option of standalone legislation in a private caucus meeting.
“It’s among our plans,” Speaker Nancy Pelosi, D-Calif., told reporters. “We spent a good deal of time in our caucus talking about lifting the debt ceiling and how Republicans refused to cooperate on this. They are jeopardizing the full faith and credit of the United States, which is guaranteed in the Constitution, the 14th Amendment.”
It’s not clear what the legislation would do exactly or how a standalone bill would advance in the evenly divided Senate, where bipartisan support is required given the 60-vote procedural hurdle unless unanimous consent is granted to drop that requirement.
Senate Republicans have said for months they are unwilling to vote for a debt limit suspension while Democrats pursue a partisan reconciliation package calling for trillions of dollars in new spending. Democrats say the debt limit must be suspended to meet current obligations, regardless of what happens with the reconciliation package.
The Senate, meanwhile, plans another attempt to pass a debt limit suspension Tuesday. Senate Majority Leader Charles E. Schumer, D-N.Y., said he would seek unanimous consent to take up a stopgap funding bill and debt limit suspension that could pass on a simple partisan majority vote, unless Republicans object.
“In other words, we would get consent that you only need 50 votes, not 60, on this vote to increase the debt limit,” Schumer said. But Senate Republicans including Patrick J. Toomey of Pennsylvania and Ted Cruz of Texas say they’d object.
“There is no universe in which I am going to consent to lower the threshold and make it easier for (Schumer) to do so,” Cruz said Tuesday. Fellow Texas GOP Sen. John Cornyn added that “there will be a number of people who will lodge objections.”
As the partisan standoff continues, time is running out. In a letter to lawmakers Tuesday, Yellen warned the government would be unable to pay its bills on time by Oct. 18.
“At that point, we expect Treasury would be left with very limited resources that would be depleted quickly,” Yellen wrote. “It is uncertain whether we could continue to meet all the nation’s commitments after that date.” She added that waiting until the last minute to act could have negative consequences for financial markets and business and consumer confidence.
Waiting for Plan B
Republicans have been goading Democrats to revise their fiscal 2022 budget resolution to insert reconciliation instructions to raise the debt ceiling, enabling them to pass it on a party-line vote in the Senate. Democrats have rejected that option as too time-consuming, given it would lead to several additional procedural steps and two more “vote-a-ramas” in the Senate.
Senate Majority Whip Richard J. Durbin, D-Ill., called using reconciliation for the debt limit a “nonstarter” but said Democrats do have a “Plan B” under consideration. He wouldn’t elaborate.
Some have speculated Democrats could attempt to change Senate rules by simple majority to lower the filibuster threshold for must-pass legislation like the debt ceiling. But with Democrats Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona opposed to the “nuclear option” for legislation, it’s not clear party leaders would have the 50 votes they need plus Vice President Kamala Harris.
House Majority Leader Steny H. Hoyer told reporters Tuesday that reconciliation might still be on the table as a last resort, though he suggested House Democrats would try first to pass a debt limit bill through the regular process. He said that measure would likely be attached to a “message bill,” or a vehicle that’s gone through both chambers with amendments, to avoid the Senate having to go through a motion to proceed.
“In the short term we may well send over a clean debt limit extension to the Senate as a message bill so that they could get to it relatively quickly, if they can get the votes,” said Hoyer, D-Md. “We may have to use reconciliation. I think that would be a sad statement of Republican irresponsibility.”
Hoyer later clarified his comments via Twitter, however, writing that using reconciliation “is certainly not the best option, nor the option we’re pursuing.”
After a previous two-year suspension in 2019, the debt limit was reinstated Aug. 1 at $28.4 trillion. But that borrowing cap will now be breached in a matter of weeks, according to Yellen and several private-sector forecasts.
A similar standoff in 2011 led to a downgrade in the U.S. credit rating, as nervous investors worried about Treasury not being able to meet its obligations to bondholders and others. To avoid such a risk in the future, Democrats have discussed changes to debt limit policies.
House Budget Chairman John Yarmuth, D-Ky., has said he would favor abolishing the debt limit altogether, because it has done nothing to curb deficits but can unnerve financial markets.
Pelosi said Democrats discussed other long-term options Tuesday as an alternative to future debt limit suspensions. She said Rep. Brendan F. Boyle, D-Pa., has proposed giving the Treasury secretary the power to raise the debt limit administratively.
“Congress would have the authority to reject that, but that would require an act of Congress and the signature of the president of the United States,” Pelosi said.
That’s a similar process Congress agreed on with the Obama administration in 2011 and 2013. But since it’s effectively giving the administration a license to raise the debt limit, some observers are skeptical Republicans would allow the resolution of disapproval option to pass this time.
Pelosi cited other long-shot options for dealing with the debt limit in the future, including Judiciary Chairman Jerrold Nadler‘s contention that Treasury should use an obscure provision of the fiscal 1997 omnibus appropriations law to mint a $1 trillion dollar platinum coin.
Her comment about the 14th Amendment to the U.S. Constitution, which states that “the validity of the public debt of the United States … shall not be questioned,” drew some interest from reporters. When asked if she’d counsel Biden to invoke the 14th Amendment to disregard the debt ceiling, Pelosi didn’t really answer.
“I’ll let you know soon,” she said. “No, I mean, the point is, it’s in the Constitution, we really do not have to go through this all the time.”
Shutdown days away
The House-passed stopgap funding measure that’s hung up in the Senate would extend federal agencies’ budget authority through Dec. 3, buying more time for a deal on fiscal 2022 appropriations. A partial government shutdown would begin Friday if Congress hasn’t acted.
Absent the debt ceiling provision, Republicans support that underlying bill, which contains $28.6 billion in aid to natural disaster victims, $6.3 billion for Afghan evacuees being resettled in the U.S. and $2.5 billion for unaccompanied children who crossed the border illegally. They also want to reattach $1 billion for Israel’s Iron Dome rocket defense system, which was dropped in the House due to objections from a group of progressives.
Hoyer said discussions were ongoing with the Senate on whether and when they’d send back a stopgap bill without the debt ceiling language. “We’re talking to the Senate about that now,” he said. “I’m sure sometime today we’re going to make that determination.”
Hoyer added that if the debt limit and continuing resolution aren’t dealt with this week, his chamber may need to revise the schedule that currently calls for no floor votes next week. “I hope it’s in the next couple of days, but if it’s not, then next week we’ll have to be on call,” Hoyer said. “We may well have to be back here next week.”
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(CQ-Roll Call's Lindsey McPherson contributed to this report.)
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