Mitch McConnell wants ten Republicans to help Democrats raise the debt limit



Senate Republicans may be on the verge of helping Democrats raise the debt limit by temporarily changing the rules of the Senate to fast-track the process.

Senate Minority Leader Mitch McConnell (R-Ky.) is reportedly seeking at least ten Republicans to agree to a strategy that would permit the Democratic majority to raise the debt limit with a simple majority vote. In a deal struck with Majority Leader Sen. Chuck Schumer (D-N.Y.), Republicans would give Democrats enough votes to change the rules, and then Democrats will pass the debt limit increase without Republican support.

A total of 60 votes are required to change the Senate rules, so at least ten Republicans must agree to McConnell's strategy to get it done.

This new bill, which has been negotiated by Schumer and McConnell, would allow the debt ceiling to be increased only up until Jan. 15 by a simple majority vote.
— Manu Raju (@Manu Raju) 1638898429
The measure requires the debt ceiling to be increased by a specific dollar amount (rather than just a suspension of the debt ceiling). McConnell has insisted on Dems being forced for a specific dollar amount (i.e. raise the debt ceiling to north of $30 trillion)
— Manu Raju (@Manu Raju) 1638898430

This is all an attempt to circumvent the 60-vote legislative filibuster on a debt-limit increase. Under the plan, the filibuster rules will be suspended for about one month, specifically for the debt limit. Democrats would then be required to raise the debt ceiling by a specific amount, somewhere in the range of $1.5 trillion to $2 trillion, which would forestall another debt limit vote until after next year's elections.

The deal negotiated between McConnell and Schumer would solve two political problems: Raising the debt limit and giving Republicans cover to claim they opposed doing so.

Every time the federal government nears its lawful limit on borrowing to cover its spending obligations, Congress votes to increase debt limit to enable the government to borrow more money. If Congress did not do this, the government would not have enough money to pay its bills and also make interest payments on the national debt.

In a hypothetical scenario where Congress does not raise the debt limit, the federal government would be forced to prioritize its spending such that expenses are not greater than revenues. This could mean drastic cuts to popular programs. It could also risk default, should the government be incapable of making its interest payments on the national debt, which economists warn would have severe economic consequences for the rest of the nation.

Even though Republicans say they are opposed to excessive government borrowing and spending, a significant number of GOP lawmakers always vote for debt limit increases to avoid the political consequences of the government being unable to borrow more money.

If Democrats were able to pass a debt limit increase with a simple majority, this would free every Republican in the minority to vote against the debt limit increase. Democrats win because the government can continue to borrow money to fund President Joe Biden's agenda. Republicans win because they will claim they voted "no" on the debt limit increase, even though ten of them will have to vote with Democrats on the procedural vote to change the rules and enable this strategy.

But will te Republicans go along with McConnell's plan? According to Politico, some of his leading GOP voices in the Senate were receptive to the strategy.

“I’m going to support Democrats raising the debt ceiling without Republican votes,” Sen. John Cornyn (R-Texas) and longtime McConnell ally said. “To have Democrats raise the debt ceiling and be held accountable for racking up the debt is my goal. And this helps us accomplish it.”

"Senate Minority Whip John Thune (R-S.D.) and Sens. Shelley Moore Capito (R-W.Va.), Roger Wicker (R-Miss.) and Roy Blunt (R-Mo.) also sounded warm on McConnell’s plan at the leadership meeting," Politico reported.

Other moderate Republicans sounded less enthused. And the conservatives in the conference will almost certainly oppose helping the Democratic majority do anything. But Schumer expressed confidence that McConnell will find the votes he needs in an uncharacteristically polite comment about the minority.

“I’m optimistic that we will be able to prevent the awful prospect of the U.S. defaulting,” Schumer said. “I continue to thank all of my colleagues for cooperating in good faith.”

'Irreparable damage,' 'financial Armageddon': Biden admin, Democratic economists sound alarm in bid to raise debt limit, warn US will run out of cash in October



Biden administration officials and Democratic economists are warning congressional leaders that if action is not taken soon to raise the country's $28.4 trillion debt limit, ruinous injury could be incurred by the American economy.

What are the details?

In a letter to top lawmakers Wednesday, Treasury Secretary Janet Yellen characterized America's financial situation as teetering on the edge of catastrophe, noting that without intervention the U.S. government would run out of cash by next month.

"Based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October," the secretary said.

As Congress deliberates raising the debt limit, Yellen warned that the uncertainty alone may inflict harm on the financial markets. She recalled the last debt limit standoff in 2011 that resulted in the United States' credit rating being downgraded for the first time ever.

"A delay that calls into question the federal government's ability to meet all its obligations would likely cause irreparable damage to the U.S. economy and global financial markets," she wrote.

What else?

Others, too, have sounded the alarm, forewarning that the effects of a debt default or government shutdown could be irreversible.

"In short, a default would be an economic cataclysm," CNN reported. "Interest rates would spike, the stock market would crater, retirement accounts would take a beating, the value of the US dollar would erode and the financial reputation of the world's only superpower would be tarnished."

"It would be financial Armageddon," Mark Zandi, a Democratic economist who leads Moody's Analytics, told the network. "It's complete craziness to even contemplate the idea of not paying our debt on time."

JPMorgan Chase CEO Jamie Dimon also urged lawmakers to action in May, according to CNN. At that time, he said a default "could cause an immediate, literally cascading catastrophe of unbelievable proportions and damage America for 100 years."

Anything else?

The comments come as congressional lawmakers approach a decision point this month on the debt limit. Reuters reported Tuesday that with both sides entrenched, the debate is set to "become a monumental game of chicken."

Republicans have cast Democratic arguments for raising the debt limit as rich considering the party's keenness for exorbitant government spending.

In May, Republican Sen. Mitch McConnell slammed Democrats' multitrillion-dollar plan to expand social services, saying, "If they want all this spending and debt to be their signature legacy, they should leap at the chance to own every bit of it" by passing a debt limit without Republican votes.

In order to do that, Democrats would reportedly need to shove the debt limit increase into a reconciliation bill that they could advance in the Senate without Republican support.

But owning the issue does not appear to be something Democrats want to do. Democratic House Speaker Nancy Pelosi told reporters Wednesday, "We won't be putting it in reconciliation," while blaming the increased debt on former President Trump.

It should be noted that both parties do share some of the blame for a continually ballooning national debt.