Two months after Republicans allowed a vote on raising the debt ceiling to cover spending through mid-December, the party is once again using obstructionist tactics to gain paltry political points, jeopardizing the health of the entire U.S. economy in the process.
This time, Republicans are going to even further extremes to threaten a debt default and subsequent recession, bucking a plan formed through negotiations with Senate Minority Leader Mitch McConnell (R-Kentucky) to pass the debt ceiling raise. The plan proposes passing the debt ceiling raise through Congress’s defense appropriations bill or creating a new process that would allow the debt ceiling to be raised with a simple majority of 51 votes.
Instead, some Republicans are insisting — as they did earlier this year — that Democrats pass the raise through the reconciliation bill, a process that would likely take weeks.
On Tuesday, Sen. Lindsey Graham (R-South Carolina) told NBC that there wouldn’t be 10 Republicans who would agree to McConnell and Senate Majority Leader Chuck Schumer’s (D-New York) proposed rule change for a simple majority vote on the debt limit. “I think Democrats should raise the debt limit through reconciliation,” he said.
House Minority Leader Kevin McCarthy (D-California) has rejected the idea to pass the debt limit through the defense bill. “Funding our troops through the NDAA should in no way, shape, or form be tied to the debt limit in process or substance,” he tweeted on Monday.
GOP senators were similarly recalcitrant. “So if I vote for the NDAA, people are gonna say I voted to raise the debt limit? I’m not for that,” Sen. John Cornyn (R-Texas) said.
Republicans have rationalized their opposition to raising the debt ceiling by saying that they refuse to fund spending from Democrats. But in reality, the current debts that need to be paid were racked up by Donald Trump and Republicans, who amassed nearly $8 trillion in debt during Trump’s four years in office. This is more than any other president added to the deficit, with the exception of George W. Bush and Abraham Lincoln, who were funding expensive war efforts.
Without the defense bill or simple majority vote avenues, Democrats have very few options left to raise the debt ceiling. In effectively rejecting all options other than the one that they favor — one that would likely allow Republicans to smear Democrats ahead of the 2022 midterms — they are backing Democrats into a corner to force their hand on the raise, or else be blamed for the economic crisis that will follow.
Treasury Secretary Janet Yellen has estimated that the country will be forced to default on its debts next week on December 15. If the country defaults on its loans for the first time in U.S. history, Yellen and economists have warned that a recession would result almost automatically.
The subsequent economic downturn, according to an analysis by Moody’s Analytics, could cost nearly 6 million jobs and would plummet household wealth by $15 trillion. It would also lead to long-term effects on borrowing rates and would have a disastrous effect on the U.S.’s credit rating. Moody’s economists have called this scenario “cataclysmic.”
This isn’t the first time that Republicans have threatened economic disaster over the debt ceiling. In 2011 and 2013, the party waged similar efforts. Both times resulted in economic turmoil; in 2011, Republicans’ efforts created a set of “hyperaustere” spending limits, The New Republic pointed out.
Democrats do have another option for raising the debt ceiling, however. Eliminating the filibuster would allow the party to pass the debt ceiling and anything else they want through a simple majority vote. However, as months of negotiations over even the smallest proposals in the reconciliation bill have shown, conservative Democrats who favor keeping the filibuster are unwilling to budge on the issue, even in the face of disaster.