'A Massive Mistake': Alarm as Dems Cast Doubt on Lame-Duck Debt Ceiling Deal

With Republicans widely expected to take control of the U.S. House of Representatives in 2023, Democrats are under pressure to make the most of the lame-duck session--but raising the debt ceiling doesn't seem to be on the table, increasing fears of what that means for social programs in the GOP's crosshairs.

The Senate Democratic whip, the party's second-ranking member in the chamber, told Bloomberg they don't plan to use the budget reconciliation process that was employed earlier this year to avoid a filibuster and pass the Inflation Reduction Act without any GOP support.

"That would not be done this year by reconciliation. It takes too much time," Sen. Dick Durbin (D-Ill.) said of lifting the debt ceiling before the Treasury's current borrowing limit is reached--which is projected to be sometime next year. "We have three weeks and there is too much else on the agenda."

Even if the Democrats tried the budget reconciliation approach, they may not have the votes in the Senate--in which Vice President Kamala Harris breaks ties--thanks to Sen. Joe Manchin (D-W.Va.), who has repeatedly held up his own party's agenda over the past two years while insisting on bipartisanship.

"I don't think it should go to reconciliation," Manchin said Tuesday of raising the debt limit, according to Politico. "My goodness, it's something we've always worked together on."

"It should be bipartisan," Manchin told reporters. "We've got to pay our bills but the bottom line is we have got to get serious about getting our financial house in order."

Durbin told Bloomberg that Senate Majority Leader Chuck Schumer (D-N.Y.) "is continuing to negotiate" with Senate Minority Leader Mitch McConnell (R-Ky.)--who was reelected to his position Wednesday--in hopes of reaching a debt limit agreement this year. However, if McConnell holds out, it sets up his party for a fight in 2023.

When asked Tuesday about the possibility of increasing the ceiling during the lame-duck session, McConnell said, "I don't think the debt limit issue is until sometime next year."

According to Politico, President Joe Biden's administration has all but given up on making a deal this year, with one senior official saying: "We'd love to do the debt limit. That doesn't magically create the votes to get the debt limit done."

As the outlet reported:

"Although there is grave risk to the economy, the gun is in Republicans' hands," said one Biden adviser, summing up the administration's view of the political stakes on the debt limit. "And there is little question as to who will get blamed for this."

A White House spokesperson noted that congressional Republicans voted three times to lift the debt ceiling under former President Donald Trump. "The debt ceiling should never be a matter of political brinksmanship," the spokesperson said. "Congress must once again responsibly address the debt ceiling before its expiration."

Leading up to Election Day earlier this month, Republican candidates made clear that if they regained control of the House or Senate, they hoped to use the debt limit battle to fight for spending cuts--specifically taking aim at Medicare and Social Security.

Biden vowed last week that "under no circumstances" will he go along with GOP attempts to cut the social safety net programs, saying: "That's not on the table. I will not do that."

However, fears are mounting that Biden could be forced to strike a deal--like then-President Barack Obama did in 2011--to prevent the first-ever default in U.S. history.

As Vox's Dylan Matthews wrote Wednesday:

President Biden could also use executive power to subvert the ceiling, either by asserting that ignoring the limit is the "least unconstitutional" option he can take (compared to ignoring tax and spending laws passed by Congress), or by minting a platinum coin worth trillions of dollars, which is totally a real option.

But despite those options, a full-on repeat of the 2011 standoff looks unnervingly possible. That ended with the Budget Control Act, which the Congressional Budget Office estimated would reduce the deficit by $2.1 trillion over a decade through massive, obligatory spending cuts. Congress later undid some of the cuts included in the BCA, but Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget and a leading budget analyst in D.C., tells me that total wound up being around $1.3 trillion. All of those savings were achieved not through raising taxes, but reducing spending. And almost all that reduced spending came from a relatively narrow slice of the federal budget, known as "discretionary spending."

Matthews noted that according to a Center on Budget and Policy Priorities report focused on 2010-21: "Economic security, healthcare, and scientific research programs were close to stagnant, falling by 4% or less. But funding for environmental protection and parks fell by 15%; general government operations by 26%; education and job training by 14%; diplomacy and foreign aid by 19%; agriculture, energy, and commerce by 19%."

Some advocates of Democrats taking advantage of the lame-duck session have pointed out that Manchin and Sen. Kyrsten Sinema (D-Ariz.)--the two key opponents of fully scrapping the filibuster--have supported an exception for lifting the debt ceiling.

"Manchin and Sinema voted for a filibuster carveout to raise the debt limit less than a year ago," progressive strategist David Rosen tweeted Wednesday. "With the risk of a cataclysmic default higher than ever, they should be pressured to back a reconciliation bill to do the same thing. The White House is giving up before even trying."

The looming debt ceiling fight--and the stakes for both U.S. programs and the global economy--has led some to urge Democrats to go beyond raising the limit while they still have control of Congress.

"Democrats should fight back by making this lame-duck session of Congress the most productive in decades," Sen. Elizabeth Warren (D-Mass.) wrote Saturday in a New York Times opinion piece. "We can start by lifting the debt ceiling now to block Republicans from taking our economy hostage next year."

"I'd get rid of the debt ceiling altogether," Warren told NBC News' Chuck Todd the following day, arguing that it "serves no function except to create leverage for people who are willing to blow up the economy."

While U.S. Treasury Secretary Janet Yellen--who backs lame-duck action to boost the debt ceiling--has previously endorsed abolishing the limit, Biden opposes that proposal.