Let’s have one cheer and a whole bunch of jeers for the latest on the debt limit.
The good news is that Congress has come up with a solution both parties can live with to raise the limit, and lawmakers cut the deal well before the latest deadline. So the markets won’t be roiled by the possibility of a debt-limit breach, let alone an actual economy-destroying default. Hurrah.
The bad news? The debt limit, the stupidest law in the nation, survives, and Congress will need to deal with it again, probably in 2023. It’s a bomb left unexploded, and it certainly could go off one of these days.
Who’s at fault? Both parties behaved badly. Republicans declared that the limit would have to be increased with only Democratic votes as long as Democrats are in the majority, which is actually consistent with the history of these things and perfectly fine. Unfortunately, that wasn’t all. Since Minority Leader Mitch McConnell couldn’t prevent some Republican senators from filibustering, Democrats needed 60 votes, rather than a simple majority, which meant they needed some Republican support. McConnell is delivering those votes — again, good — but presumably on the condition that Democrats choose a modest increase, only enough to get through the midterms. Republicans also pushed for Democrats to increase the limit by a specific number, rather than just suspending it to a later date. That’s a lot better than what they were threatening earlier this year, when they wouldn’t supply the votes to defeat a filibuster at all, which was a truly irresponsible position. It’s still not great.
But really the Democrats are most at fault here. They could’ve included a practical elimination of the debt limit in the relief bill passed earlier this year, or the “Build Back Better” bill they’re working on now. Both of those are going through the reconciliation procedure, which imposes some constraints but also protects bills from filibusters, meaning that they’d only need simple majorities in both chambers. Or they could’ve used a third, free-standing reconciliation bill for the debt limit. In any event, using reconciliation would mean that they couldn’t technically eliminate the debt limit entirely, as they could with normal legislation, but they’d be free to raise it to a preposterously high number.
(My favorite preposterously high number? Call it the “Constitutional Option” and raise the debt limit to 1,787 to the 1,787th power.)
To do this, they’d need all 50 Democratic votes in the Senate and could only afford a few defections in the House. It’s possible that there are some congressional Democrats who sincerely think that the debt limit is a good thing and wouldn’t vote to effectively eliminate it. That would be bad; there’s simply no good reason for a mechanism that does nothing except force members to make votes they don’t like, with horrific consequences if for some reason they fail to do so.
Even worse, there are probably Democrats who somehow think that their constituents would be fine with them voting for the $1.9 trillion American Rescue Plan, the $1.2 trillion bipartisan infrastructure bill, another trillion-dollar Build Back Better bill, a short-term debt-limit bill and this current increase — but would somehow freak out if they got rid of the debt limit entirely. There are zero voters who think like that. If Democrats are vulnerable to charges of spending too much, running deficits that are too high or raising the debt limit, so be it. All they’re doing here is setting up another vote they won’t want to take in 2023.
At any rate, we’re not going to have a government shutdown and we’re not going to have a government default. So yeah, one cheer for Congress. They could’ve done a lot better.