Illustrated | Getty Images, iStock, Library of Congress
Later this month, likely sometime on October 18th, the United States will hit its statutory “debt ceiling” and default on its obligations. While this might seem as harmless as maxing out a credit card, it would be the economic equivalent of letting every nuclear reactor on Earth melt down at the same time, with devastating consequences. And because Senate Minority Leader Mitch McConnell (R-Ky.) is intent on using the filibuster to block legislation raising the debt ceiling, the Senate’s ridiculous 60-vote threshold might finally be in real danger.
The U.S. actually hit the debt ceiling on August 1st, and the Treasury Department has been using smoke and mirrors to continue financing debt and spending obligations. Those measures will soon cease to be a viable workaround, and then we would be in uncharted territory. Economists differ about how catastrophic a default would be in the short term, but if the situation is allowed to fester, there is no doubt that the damage would be unimaginable. The U.S. would have to cut current spending by 40 percent, there could be a run on money markets, the stock market would almost certainly implode, credit would dry up and the global economy could be plunged into another recession.
That sounds like a dire enough scenario that it should unify, if only briefly, America’s warring political parties. But the GOP, which raised the debt ceiling repeatedly under former President Trump with substantial cooperation from Democrats, is not a normal political party but rather an authoritarian cult willing to inflict incredible suffering on the American people for the sake of political gain. We are talking about a group of people willing to let tens of thousands of their own constituents die of COVID-19 with opposition to masks and vaccine mandates, all because they think there is electoral hay to be made in the sunshine of a viral plague.
What’s in this debt mess for Republicans? A breach of the debt ceiling would lead to economic mayhem, which in addition to wrecking the lives of millions of people in the U.S. and around the world, would be bad for President Biden and the Democrats. For McConnell and other Republicans looking for a path back to power, total obstruction on the debt ceiling would do two things at once: send another torpedo into Biden’s political fortunes, which are already listing starboard and taking on water, and then set everyone up for a fresh round of safety net-shredding austerity when the GOP rides the disaster back into congressional majorities next year.
That’s why McConnell is dug in, and why it is so baffling that the president keeps insisting that disaster can only be averted with McConnell’s help. “That’s up to Mitch McConnell,” he keeps saying, as if McConnell wouldn’t be positively giddy if this humiliating fiasco happened under a Democratic government.
Democrats, of course, control both chambers of Congress and the presidency and could easily prevent any of this from happening. No member of the party’s caucus in either the House or the Senate would vote against raising the debt limit. But Biden has publicly reiterated that he doesn’t support changing the filibuster rule to raise the debt ceiling. Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) remain adamant that they won’t support reform, even as the debt ceiling crisis draws closer and closer. Hence the impasse, and the lack of action.
Is there anything else that can be done? Let’s get one thing off the table: The president is highly unlikely to mint a trillion dollar coin. The man cannot even bring himself to cancel incremental amounts of student debt using executive action. White House spokesman Mike Gwin ruled it out definitively last month, saying, “There is only one viable option to deal with the debt limit: Congress needs to increase or suspend it, as it has done approximately 80 times, including three times during the last administration.”
That means no platinum coin and no declaration that the debt ceiling itself is unconstitutional. Democrats are out of time to stuff a debt limit hike into a reconciliation spending package – which can pass the Senate with just 50 votes instead of 60 – which is still being held ransom by Manchin and Sinema.
And so something or someone has to give here. And there are really only three things that can happen: Senate Majority Leader Chuck Schumer (D-N.Y.) can produce 10 Republican votes to raise the debt limit, Sinema and Manchin can come around on the filibuster, or the whole economic enchilada can go kablooey.
Thus far, the two attention-hogging knuckleheads holding up the entirety of Biden’s agenda have withstood extraordinary pressure from the party’s base as well as their colleagues, and have not budged on filibuster reform. They still seem more interested in their own 2024 re-election fortunes than in whether Democrats have any power whatsoever in January 2023. Yet saying no to a minimum wage hike or immigration reform is one thing – standing by while the global economy goes into completely preventable freefall is quite another.
This is a fluid situation, and trying to predict events more than a few hours out is folly. But the guess here is that if Republicans stand firm – and there is no reason to think they won’t since McConnell rarely faces defections from his flock once he has made a decision – Manchin and Sinema are going to blink, at long last, and agree to set aside the filibuster rule in some fashion to get a debt limit hike passed. If they don’t, their precious bipartisan infrastructure deal will go up in the same conflagration as everything else.
Of course, they could agree to change the filibuster just this once and then snap right back into recalcitrance afterwards. But perhaps Manchin and Sinema’s long-suffering 48 colleagues in the Senate can use their leverage here to demand permanent reform rather than a carve-out for the debt limit. While the two holdouts have extraordinary power to block progressive change, in this case they will have to give in or watch something truly unimaginable and terrible happen right away, while simultaneously taking all the blame. Instead of having their names attached to landmark legislation, they will forever be synonymous with a worldwide depression.
Like everyone else, I’ve mostly given up trying to figure out how to move Manchin and Sinema off their commitment to the filibuster. But maybe, just maybe, the prospect of an extinction-level economic event will accomplish what the increasingly panicked prodding of their colleagues and the relentless pressure from angry progressives has thus far failed to do.