Kash Jain ’24
Time is running out for Congress to lift the debt ceiling as the federal government inches closer to defaulting.
We have been here before. Congress has raised the debt ceiling 78 times since 1960 alone, each time allowing our government to borrow money to cover its obligations, including critical services for tens of millions of Americans. The U.S. reaching the debt ceiling would render the Treasury unable to pay for existing obligations, forcing it to default on the country’s debt and likely creating a global economic crisis. Despite disputes over raising the debt ceiling over the years, Congress has always managed to come to an agreement and the federal government has avoided defaulting on its debt. However, Senate Minority Leader McConnell has been adamant that Republicans will not support any effort to raise the debt ceiling. In a 50-50 Senate with a 60-vote threshold to end a filibuster, any legislation supported by only one party is exceedingly difficult to pass, even if all members of the majority are in agreement—but the complete unwillingness of Republicans to come to the table on this issue will make it even more difficult for Congress to lift the ceiling, putting the United States at serious risk of defaulting.
Defaulting would undoubtedly have dire consequences. Last week, Treasury Secretary Janet Yellen wrote that the U.S. defaulting “could trigger a spike in interest rates, a steep drop in stock prices, and other financial turmoil. Our current economic recovery would reverse into recession, with billions of dollars of growth and millions of jobs lost.” In a 2011 letter to then-Senate Majority Leader Harry Reid, then-Treasury Secretary Timothy Geithner outlined three significant impacts that could result from the U.S. defaulting. Firstly, there would be a considerable rise in interest rates, negatively impacting state and local governments as well as consumers. Additionally, the U.S. would be unable to continue paying for benefits, including Social Security, Medicare, and salaries for federal employees and military personnel. Most devastatingly, the U.S. dollar would drop in value, reducing international trust and interest in investing in the United States as well as sending shockwaves through global markets.
All of this would be avoided by simply raising the debt ceiling. This is not an issue where policy preferences or ideologies should come into play; it is not one where the right course of action is unclear. It is about preventing an economic disaster that would likely impact us for decades to come. Despite this, Republicans have been adamant in their refusal to support raising the ceiling, instead insisting that Democrats do it alone while also fully intending to use the filibuster to block them from doing so. Florida Senator Rick Scott, Chairman of the National Republican Senatorial Committee (NRSC), suggested that the NRSC may use Democrats choosing to raise the debt ceiling in campaigning during midterm elections next fall. It is clear that Republicans are prioritizing political gain over avoiding a disaster, which is indefensible.
Some Senators, including McConnell, have suggested that they are opposed to raising the debt ceiling because they do not want to allow Democrats to increase spending, particularly through the infrastructure package that Congressional Democrats intend to pass through reconciliation. However, this is an illogical argument given that raising the debt ceiling does not increase spending — it simply allows the government to meet its existing obligations. Plus, Republicans added nearly $2 trillion to the deficit in 2017 through the Tax Cuts and Jobs Act while the debt ceiling was suspended, which policy analysts estimate will continue to be paid off through 2026 or 2027. Surely Republicans also have an obligation to allow for the repayment of debt they incurred through partisan legislation?
Geithner’s letter put it best: “these are legal obligations, incurred under the laws of the United States. Responsibility for creating the debt is bipartisan, and responsibility for meeting the Nation’s obligations must be shared by both parties.” Both parties have contributed to the debt, so they both should support increasing the debt ceiling.
However, Democrats — particularly those in Senate leadership or those who have continuously voiced opposition to filibuster reform — cannot be complicit and cannot allow the minority party to block an increase to the debt ceiling. Regardless of the possible political fallout from a partisan increase to the debt ceiling, the crisis that would be caused by failing to act must be averted. Democrats certainly have the power to ensure that it is by either using reconciliation to avoid the 60-vote threshold or by reforming the filibuster so that they are not reliant on Republican support to pass an increase.
Congress needs to raise the debt ceiling, and if Democrats have to do that without the support of Republicans and by reforming the filibuster, they must.