US Debt Forum Articles

Senate Republicans take step to revive debt ceiling brawls with White House

The non-binding vote is a sharp pivot from their hands-off approach during the Trump administration

Senate Republicans on Wednesday signaled they might oppose any future increase to the debt ceiling unless Congress also couples it with comparable federal spending cuts, raising the specter of a political showdown between GOP leaders and the White House this summer.

Republican lawmakers staked their position after a private gathering to consider the conference’s operating rules this session, issuing what GOP leaders described later as an important yet symbolic statement in response to the large-scale spending increases proposed by President Biden in recent months.

“I think that is a step in the right direction in terms of reining in out-of-control spending,” Sen. Ted Cruz (Tex.) told reporters after the meeting.

The debt ceiling is the maximum amount the U.S. government is allowed borrow to meet its financial obligations. Congress previously agreed to suspend the limit through July 2021, at which point the Treasury Department has only a few months of “extraordinary measures” it can take before lawmakers must either raise the amount — or face the unprecedented consequences of default.

Republicans raised hardly any complaints about the debt ceiling during the Trump administration, voting frequently to increase it without requiring any spending cuts in return. Over that period, the federal debt increased by roughly $7 trillion as Trump pushed for large levels of military spending and slashed taxes for U.S. corporations.

But Republicans quickly revived their calls for austerity once Biden entered the White House, much as they had done in the past when Democrats took control in Washington. The spending concerns also contributed to GOP lawmakers’ unanimous opposition to Biden’s $1.9 trillion coronavirus relief plan earlier this year, on top of the party’s more recent apprehension about the White House’s roughly $2 trillion stimulus package.

On Wednesday, Sen. Rick Scott (R-Fla.) on Wednesday put forward the initial proposal targeting the debt ceiling, which his office described as an attempt to battle back Democrats who have sought to “spend recklessly, driving up inflation,” in recent months. It finds the conference should consider either budget cuts or “meaningful structural reform” to spending in exchange for the debt ceiling increase.

It is not clear how the policy might apply in the event Democrats seek to suspend the debt limit, rather than raise the amount. It also is not binding on the party, in keeping with the Republican conference’s other rules. Sen. John Cornyn (Tex.) later described it as “aspirational,” and Sen. Mike Rounds (S.D.) acknowledged that all of the resolutions party leaders considered Wednesday are “just resolutions,” adding: “The rules themselves are something we strive to follow.”

The tactic echoed Republicans’ demands during the Obama administration, when GOP lawmakers at one point forced the White House at the time to install a decade of spending caps in exchange for an increase to the debt ceiling. But the showdown spooked financial markets and nearly led the government to default on its debt, prompting Obama to vow never to negotiate with Republicans in this way again.

Fearing a return to those fights, Democratic Sen. Ron Wyden (Ore.) on Wednesday blasted Republicans for trying to hold the “debt ceiling hostage” in a move that threatened massive consequences for the global economy.

“This is a page from the Obama-era economic sabotage playbook, and I’m not going to let Republicans play games with the economy for their political benefit,” he said in a statement.

To avert a showdown, Democrats may have at their disposal a budget process known as reconciliation that could allow them to raise the debt ceiling with only 51 votes. But some of the party’s members have expressed a reticence to use reconciliation too often. The process also would not allow Democrats to suspend it outright, much as they did two years ago, according to Senate aides.

If Republicans refused to raise the debt ceiling, many economists have warned that it could lead to an economic crisis because confidence in U.S. government debt could plummet. In 2020, the government ran a $3.1 trillion deficit, meaning the government spent $3.1 trillion more than it brought in through revenue. It made up the difference by issuing debt and borrowing the money. If it cannot borrow more money, the government would be unable to pay all of its bills.

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Tony Romm is a technology policy reporter at The Washington Post. He has spent nearly ten years covering the ways that tech companies like Apple, Facebook and Google navigate the corridors of government — and the regulations that sometimes result.Follow

April 21, 2021 at 3:53 p.m. MST

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