Senate Republican Leader Mitch McConnell is a skilled tactician who prides himself on playing the long game. On the debt limit, however, he and his fellow Republicans are suffering from a severe case of political myopia, along with a lack of imagination. It is the Democrats who are focused on larger goals, although the expense of their plans leaves them vulnerable in the short run.
The debt limit places an upper bound on the amount of money the federal government can borrow to meet its financial obligations—including for Social Security and Medicare benefits, the salaries of federal workers and military personnel, and interest payments on previously issued debt instruments. The debt limit doesn’t add to debt; it just caps how much can be borrowed to pay for the spending Congress has authorized in excess of the taxes it has been willing to impose. Yet it has been a political football for years, and generally serves no good purpose. The best outcome would be to get rid of it altogether because it only creates risks for the U.S. economy, without any comparable benefits. Even a one-time missed payment would lead some creditors to wonder about the reliability of the federal government’s vast financial commitments. Unfortunately, Republicans seem unlikely to go along with jettisoning it.
The question before the GOP is how to handle the inevitable approval of an increase in the limit while battling the Biden administration and congressional Democrats over their spending plans. Current projections show the Treasury will run out of room to borrow in public markets sometime in the mid-October to mid-November timeframe. The federal government had a deteriorating fiscal outlook even before it borrowed heavily in 2020 and 2021 to limit the economic damage from the COVID-19 pandemic. Since 2016, federal debt has climbed $8.8 trillion.
There is no disagreement between the parties on what needs to happen now to avoid a needless crisis. No one wants a default. Congress must approve a debt limit increase one way or another, and soon. The only question is how it will occur.
On that score, Senate Republicans have made it clear they will not play a constructive role, even though they cut taxes in 2017 and agreed to trillions in pandemic-related legislation in 2020. Senator McConnell’s argument is that holding power brings with it certain unpleasant responsibilities. The Democrats control the White House and Congress, and so, he contends, it is on them to raise the debt limit. He is urging House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer to include a debt limit increase in a reconciliation bill, which can pass in the Senate with no Republican support.
As a political tactic, it might work. The current spending bill the Democrats are assembling is, at $3.5 trillion, historically expensive and highly controversial. It is full of new entitlement commitments and large tax increases. Many Democrats view the contents of this legislation as the fulfillment of career-spanning ambitions. Adding a debt limit increase to the mix, in this current bill or a separate measure, will make an already politically challenging situation even more difficult.
That is certainly the expectation of Senate Republicans. They hope that forcing Democrats to shoulder this political burden on their own will help the GOP retake control of Congress in next year’s midterm elections.
While this might appear to be shrewd political maneuvering, it is actually an abdication of responsibility with long-term political risks. If you are a sitting GOP senator or representative, then stopping, or at least substantially altering, the spending legislation now being assembled by Democrats should be among your most important policy objectives. Yet, the GOP is telling the world not to worry about an increase in the debt limit because the Democrats will pass one in conjunction with their spending plans. In fact, the GOP is going even further and saying this is the only way the debt limit can be raised this year, and therefore it is imperative for the Democrats to succeed at some point with enactment of at least a portion of their agenda.
Defenders of McConnell and his colleagues will argue they cannot stop the Democrats from proceeding with their spending plans, so why not make what they are going to do anyway as politically painful as possible?
That logic is flawed because, as should be obvious from today’s headlines, nothing is inevitable at this point. Every day brings new stories of additional challenges blocking Democratic progress. Sen. Joe Manchin has called for a pause in further consideration of the bill. He also has expressed deep reservations about much of its contents. There are many other Democrats similarly worried about various components of the legislation, including its tax increases and planned pricing limits for prescription drugs.
Sen. McConnell has many options besides passivity, and much leverage. For instance, he could advise the Biden administration and Speaker Pelosi that he and nine of his colleagues would be prepared to support a one-month reprieve on the debt limit as soon as the president signs the bipartisan infrastructure plan into law. This would put pressure back on the House to pass the infrastructure plan, which might then also sap political support from the far more expensive reconciliation bill.
He also could publicly announce that he has asked several of his members—most likely those who were central to the infrastructure bill—to begin working immediately with Sen. Manchin and any other willing Democrats on a sensible bipartisan plan for updating the nation’s tax laws and social welfare programs, which could also include a long-term debt limit increase. Taking a proactive position would make it more difficult for Sen. Manchin and other likeminded moderates to eventually support a large Democratic plan due to the lack of a viable alternative.
The folly of the Republicans’ current tactics is apparent when considering what they would do if they were back in full control of the government. Would they roll back the spending increases the Democrats set in motion in 2021? The historical record makes it obvious they would not. Once these programs are in federal law, the GOP will never have the courage to push back on them, or even to scale back their reach.
The Democrats understand this political dynamic very well. They are focused on securing as much of their agenda as possible, even if it means encountering stronger headwinds next year. In addition to addressing policy questions they believe demand attention, the many new streams of federal spending they plan to authorize will eventually create constituencies that work to their political advantage too.
Republicans gave up caring much about public policy some time ago, and it shows. They appear to be at peace with enactment of the Democrats’ agenda because they think it will help return them to power. Of course, once they are in charge again, they will not alter in any way the size or purpose of the federal government, or even offer reform plans to modify the nation’s social welfare system. That’s the Democrats’ job.