The Senate returns to work Monday, anticipating a far different future from what most senators expected when they left Washington a month ago. Democrats, all but resigned to being in the minority come 2023, have managed to hang on to their majority, and they may still add a seat to their ranks.
Democrats’ top priority is even clearer after Election Day: raising the debt ceiling and preventing economic catastrophe.
Several items remain before the new Congress and a Republican-controlled House: codifying same-sex marriage, protecting elections with the Electoral Count Act and much more. But Democrats’ top priority is even clearer after Election Day: raising the debt ceiling and preventing economic catastrophe.
Let’s be clear about the destructive fallout of not raising the debt ceiling and forcing a debt default. In that scenario, the government wouldn’t have enough money to meet all its expenses. Roughly 20% of government expenditures would be unfunded, according to a 2019 estimate by the Congressional Budget Office. That alone would be enough to hurt the economy, but the truly terrible consequences would come from the financial markets that depend on U.S. Treasury bonds’ remaining a stable benchmark. “A default would send shock waves through global financial markets,” says the president’s Council of Economic Advisers, “and would likely cause credit markets worldwide to freeze up and stock markets to plunge.”
Even “merely” playing chicken with the debt limit has created chaos. In 2011, House Republicans threatened the country with default unless President Barack Obama agreed to significant spending cuts. Though default was averted, the GOP’s recklessness increased the government’s borrowing costs and decreased consumer confidence. Republicans are well aware of these dangers, which is why they helped raise the debt limit three times during Donald Trump’s presidency.
But with a Democrat in the White House, Republicans have barely hidden their excitement at putting a gun to the economy’s head. Rep. Jim Banks, R-Ind., chair of the hard-line Republican Study Committee, described the debt limit as “a major leverage point.” Rep. Jason Smith, R-Mo., the senior Republican on the Budget Committee, called it a “tool … to right size the federal government.” House Minority Leader Kevin McCarthy, R-Calif. — still the favorite to become speaker in the new House — endorsed this brinkmanship.
And yet, when the Senate recessed before the midterms, Democrats seemingly didn’t have the votes to raise the debt limit along party lines. With no votes to spare, Senate Majority Leader Chuck Schumer, D-N.Y., has had trouble getting his caucus to move swiftly at the best of times. And close observers like Adam Jentleson, who was an aide to former Senate Democratic leader Harry Reid of Nevada, believe some moderate Democrats see the debt limit debate as a way to a grand bargain on “reforming” Social Security and Medicare.
The responsible course here is to raise the debt ceiling without preconditions, preferably to a limit so high that the government doesn’t hit it for years, if ever.
The Democrats dragging their feet should take another look at Tuesday’s results. Across the country, voters rejected Republicans, who ran most openly on subverting the country’s democratic norms and returning the nation to the instability of the Trump years. A clear majority of voters have no interest in politically induced chaos — like, say, a debt default. They want lawmakers who act responsibly, and the responsible course here is to raise the debt ceiling without preconditions, preferably to a limit so high that the government doesn’t hit it for years, if ever.
As for a grand bargain on entitlements, there’s not a shred of evidence that voters are interested in any entitlement “reforms” — by which these senators mean shrinking the programs. Social Security and Medicare should be strengthened and expanded, not reduced.
But regardless of one’s view about entitlements, tying such deal-making to the debt ceiling is ludicrous. The Republican view that the president’s party would be blamed for the economic collapse may be some very twisted logic — but that doesn’t mean it’s wrong. Blowback over sharply rising unemployment wouldn’t be avoided by pointing at the other party that controls only half of Congress. And even if voters did blame Republicans, on a more fundamental level it is incredibly irresponsible to risk a debt crisis now to avoid another later. If conservatives and moderates want a conversation about entitlements, let’s have it without holding the whole economy as a hostage.
Voters sent a clear message Tuesday: They’re tired of the government by chaos championed by Trump and his far-right devotees. Careening headlong toward economic crisis just a few months later would be a catastrophic misstep for Democrats. The solution is simple: Save the country; raise the debt ceiling.
