To pay for their spending plans, the White House and congressional Democrats will need to boost the limit on U.S. federal debt this year. They could face a familiar roadblock: maverick West Virginia Democrat Sen. Joe Manchin.
While the limit has been suspended through the end of July and won’t need to be dealt with likely until late summer or early fall, Democrats are already beginning to think of how to avoid a repeat of 2011, when Republicans used it as leverage to force modest spending cuts.
To prevent a repeat of that, Democrats would need to be able to pass an increase on their own, using the budget reconciliation process they used to push through the $1.9 trillion economic stimulus package. But in order to do that, they would need Manchin’s signoff and Thursday he told reporters he had reservations.
“I’ve not been a big fan of the debt ceiling since I’ve been here, busting that,” Manchin said.
“The bottom line is I’m very much concerned about the accumulation of debt if we don’t have a trajectory of where we’re going to have revenues to pay for it,” he said.
Reconciliation bills spin out of budget resolutions that pass both chambers of Congress. Democrats thought at the start of the year they would have only two budget resolutions, and thus only two reconciliation cycles, this year, but were told by Senate Parliamentarian Elizabeth MacDonough simply revising a budget resolution would also unlock another chance at reconciliation.
A Senate Democratic aide said Thursday the idea of using a reconciliation bill to boost the debt ceiling has been discussed at the staff level but the aide believed senators would prefer to vote on a debt limit hike “in conjunction with other important matters.”
Senate Budget Chairman Bernie Sanders said conversations with MacDonough are continuing on the issue of revising the most recent budget resolution.
“I think it’s an ongoing discussion,” he said.
Among the items Democrats are seeking clarity on are what kind of reconciliation bills – which are limited to dealing with spending, revenues and the debt limit – can be spun out of a revised resolution and how much the previous resolution would need to be revised, according to the aide.
The Bipartisan Policy Center in early February estimated the date by which the Treasury Department risks default without an increase or another suspension would occur “in late summer or early fall.” The Treasury could shed some light on the issue next week, when its debt managers hold their quarterly press conference on debt management.
Sen. Ron Wyden, chairman of the Senate Finance Committee that has jurisdiction over the debt limit, declined to give a timeline for action on the ceiling or whether Treasury had given him a time horizon for when it would be needed.
But Wyden said he doesn’t want to see the issue used as “a tool for economic sabotage.”
“The last time Republicans held the debt ceiling hostage they nearly crashed the global economy. Of course, they had no interest in holding the debt ceiling hostage when Donald Trump was president and they were showering mega-corporations and the wealthy with hundreds of billions in tax breaks,” he said.
To get a debt ceiling enacted in 2011 with a Republican House, then-President Barack Obama agreed to a have a bipartisan panel of lawmakers — the so-called Super Committee — look at deficit reduction ideas. When the panel failed to come to agreement, caps on the annual discretionary spending by Congress for federal agencies kicked in, but those cuts were softened in a series of two-year bipartisan budget deals that drastically reduced the caps’ effectiveness.
Manchin rejected the premise he could be forced to provide the 50th vote for debt hike because of Republican intransigence.
“Everybody thinks it’s the only way. ‘It’s the last chance, OK? Blow the place up,’” he told reporters.
But he said Republicans deserved a chance to prove that would not be the approach this time and noted bipartisan support for a recent hate crimes bill as an example.
“They made their amendments, they made their point, they lost and they still voted for it. Give them a chance. You’d be surprised, I think,” Manchin said.