The outlines of the clash that brought America to the brink of default in the fall of 2013 were straightforward. Claiming the mantle of fiscal rectitude, Republicans stood firm against an increase in the federal borrowing limit. Democrats lambasted the GOP for playing politics with the nation’s credit, risking a calamitous default.
On the surface, not much appears to have changed in the eight years since the last congressional debt crisis roiled Capitol Hill. But as leaders of the two parties settle into familiar roles this week, they are doing so against a markedly different political landscape.
While both parties continued to advance policies that add substantially to the debt, roughly $10 trillion, the public’s interest in the issue has dramatically waned.
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A Gallup poll in 2013 found that one-fifth of Americans saw the federal budget as the nation’s top problem. In August, only 2 percent of Americans thought the same.
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Lawmakers and strategists for both parties said this week that despite the change in public opinion, the political approach has not changed much for either party. Republicans, who have played a major role in growing budget deficits, still see federal spending as a potent issue with both their conservative base and with swing voters. Many Democrats still fear that voting for a debt-ceiling increase will prove to be a potent attack against them in tight races in next year’s midterms.
But as the Gallup poll indicates, the data underpinning those assumptions is sketchy at best — raising the possibility that lawmakers are risking a catastrophic economic meltdown for meager political stakes.
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“I think this is a very dangerous exercise that we’re in right now,” said Sen. Jon Tester (D-Mont.).
The debt-ceiling fight, explained
Yet the cycle continued Thursday: Senate Minority Leader Mitch McConnell (R-Ky.) reiterated that Republicans would play no part in voting to increase the debt limit.
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“This could not be simpler: If [Democrats] want to tax, borrow and spend historic sums of money without our input, they’ll have to raise the debt limit without our help,” he said. “This is the reality.”
Senate Majority Leader Charles E. Schumer (D-N.Y.) in turn accused Republicans of embracing “Alice in Wonderland logic” and solidifying the GOP as “the party of default.”
“Both sides incurred the debt; both sides should pay it,” he said.
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On the sidelines of the clash, however, some lawmakers questioned whether the public truly cared about the issue. While numerous Democrats said they were incensed at what they called Republicans’ hypocrisy for essentially running up a credit-card bill and skipping the payment, many said they were prepared to eliminate the debt ceiling entirely.
And a few, including Sen. Tim Kaine (D-Va.), said a standoff with Republicans over the borrowing limit was not worth distracting from the party’s push for sweeping new tax, climate, health-care and safety-net legislation.
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Kaine said he was “much more focused” on writing that bill, known as Build Back Better, than on the debt ceiling. “I hope leadership figures it out,” he said. “I get that we want Republicans to do the right thing. But I don’t think there’s a downside — I think there’s less of a downside to voting on a debt ceiling increase than there is on not getting action on the reconciliation priorities, because people are hurting still.”
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Sen. Jeanne Shaheen (D-N.H.) said she had seen no evidence that the public is engaged in the debt debate.
“It’s been in the news for a week or so. We track our calls and emails to the office every day, and it hasn’t come up once,” she said.
Some Republicans, such as Sen. James Lankford (Okla.), fully acknowledged the public apathy while saying they saw it as a matter of principle anyway.
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“We have $28 trillion in debt. Our economy is still growing. We’re still getting people hired. So why are you worried about this?” said Lankford, who was first elected to Congress in the 2010 tea party wave that was fueled by dire warnings of fiscal collapse. “And myself and a couple others continue to say you have to worry about debt because one day it will be a very big deal.”
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Lankford like almost all Republicans voted for President Donald Trump’s 2017 tax cut package that is projected to add $1.9 trillion in debt and consistently supported increased defense spending. Republicans also supported pandemic relief bills passed during the Trump administration that adding significantly to the debt.
GOP voters’ concerns about the deficit have risen since President Biden was elected, while Democrats’ have dropped. A Pew survey found 71 percent of Republicans calling federal budget deficits a big problem in April 2021, up from 49 percent in June 2020, under Trump. Overall, the poll found about half of Americans listed deficits as a big problem, on par with violent crime, illegal immigration and gun violence.
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The stakes for raising the debt limit are considerable. An analysis from Moody’s Analytics released this week found that a prolonged debt ceiling crisis could spark a recession, costing as many as 6 million jobs and sending unemployment up to as much as 9 percent.
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The Treasury Department estimates the limit will be reached sometime in mid-October, giving lawmakers only a matter of weeks to hash out a way forward. Republicans are calling on Democrats to use the special Senate budget rules known as reconciliation to raise the ceiling — the same procedures they are planning to use to pass the sweeping Build Back Better bill. Democrats have so far refused, arguing that it’s not their sole responsibility to pay bills that Republicans helped incur — and continue to help incur.
The bipartisan infrastructure bill that passed the Senate in August, for instance, is expected to add $256 billion to federal deficits over the coming decade, according to the Congressional Budget Office, and McConnell and 19 other Republicans voted for it.
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Still, Republicans appear eager to use the vote to advance a broader narrative of Democratic economic dysfunction — connecting a debt-ceiling vote to broader attacks on rising inflation and the party’s plans for a significant expansion of federal spending. Unlike during the 2011 and 2013 debt standoffs, Republicans are not pushing Democrats for concessions on spending — they are simply demanding they own the vote politically.
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McConnell on Wednesday appeared alongside Sen. Rick Scott (R-Fla.), chairman of the GOP’s Senate campaign committee, to deliver yet another ultimatum that Democrats would have to act on the debt ceiling themselves.
Scott declined to directly address the political implications of a vote to raise the debt limit but said Democrats were acting as if they were serious.
“The Democrats must be worried about it, though, or they’d be doing it on their own,” he said. “So they must have a big concern that .？.？. it will hurt their campaigns.”
Senate Republicans say they will vote to allow a debt default, leaving Democrats scrambling for plan to avert economic crisis
Raw political tactics appear to be shaping at least part of the current standoff. While recent debt-ceiling increases have simply suspended the limit to a future date, many lawmakers and aides believe that the current Republican position — forcing the debt-ceiling increase into the reconciliation process — would foreclose the possibility of a suspension and force Democrats to raise the actual dollar figure. That number, which could approach $30 trillion at a minimum, could play directly into next political year’s political advertising.
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Democratic aides familiar with the issue who spoke on the condition of anonymity to describe internal talks said that while it appears that the debt limit would have to be raised to a set number in reconciliation rather than suspended, the question is not fully settled and could still be litigated with the Senate parliamentarian.
Many Democrats say they believe that, as in 2013, Republicans will ultimately shoulder a greater share of the blame as the showdown proceeds for precipitating a potential financial crisis.
“It is already clearly the case that Republicans are going to attack Democrats for being fiscally reckless big spenders, and having a debt-ceiling vote doesn’t really add to that,” said Democratic pollster Geoff Garin. “But McConnell’s ploy puts Republican fingerprints on the dagger that is being stabbed into the back of the economy.”
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But former congressman Steve Israel (D-N.Y.), who led the Democratic House election efforts during the 2011 and 2013 debt-limit standoffs, warned that a potential government default could further complicate Biden’s efforts to convince the country that his election would help move beyond the political turmoil of the Trump administration.
“It conflicts with the narrative that we are getting healthier and stores are opening up and the economy is getting better,” Israel said. “It becomes part of a narrative of chaos and instability.”
Some Democratic senators said that they believed at least a touch of chaos was in order.
“We’re going to keep voting to increase the debt ceiling, and at some point, the American public will see that Republicans are cratering the economy,” said Sen. Chris Van Hollen (D-Md.), who compared the potential drama to 2008, when Wall Street imploded as Congress dithered on providing bank bailouts. “If you want to see the stock market and the economy crash before your eyes, watch what happens when Republicans block the debt ceiling.”
Meanwhile, a growing number of Democrats say the party should explore options for eliminating the need for routine debt ceiling hikes entirely — by, perhaps, automatically raising the limit to meet the authorized level of federal spending or by setting the debt ceiling to such an absurdly high amount that it would never be breached again.
“I want to raise it to a gazillion dollars and just be done with it,” House Budget Committee Chairman John Yarmuth (D-Ky.) told reporters this week.
But removing a sloppily handled hand grenade from the American political system stands to be a tricky proposition, one that could open some vulnerable Democrats to attacks for eliminating one of the few mechanisms for enforcing fiscal discipline.
Sen. Mark Kelly (Ariz.), one of the Democratic incumbents who will be seeking reelection next year, demurred this week when asked whether he would support permanently defusing the risk of default.
“We shouldn’t be going up to the line on this and putting the full faith and credit of the United States at risk,” he said. “We’ve had this, and we should be able to come together in a bipartisan way to raise the debt limit like we have in the past.”
Scott Clement and Michael Scherer contributed to this report.