WASHINGTON – The United States is within two weeks of a government deadline to exceed the debt ceiling, and leaders in the nation’s capital are at a stalemate over how to avoid what could be a devastating flaw.
The House of Representatives passed a bill to extend the borrowing limit until December 2022, but the bill faces a deadlock in the Senate ahead of a procedural vote scheduled for Wednesday.
Republicans threatened to filibuster. At least 10 GOP votes are needed to overcome this in the divided chamber. Democratic leaders say they should drop the filibuster and allow a vote, which would allow their 50 members to pass it themselves.
Republicans say Democrats should instead use a complicated budget process to raise the debt limit and allow the United States to pay its bills, which can be done without the support of Republicans. Democrats say no.
So far neither side is moving. The Treasury Department has set a deadline of Oct. 18 to tackle the debt ceiling or risk “catastrophic” economic consequences if the United States cannot pay its bills.
Here are five possible endgames – and the complications of each.
Republicans blink and allow a vote
The fastest way to solve the problem would be for Republicans to drop filibuster and let the Senate vote at a simple majority threshold. Democrats could pass it with their 50 members and Vice President Kamala Harris’ decisive vote.
But only one senator can oppose and force a “closing” vote, and Sen. Ted Cruz, R-Texas, told NBC News on Tuesday he would. It would then take 60 votes to overcome this. That means a minimum of 10 Republicans – and as of right now, there are no takers.
Senate Majority Leader Chuck Schumer, DN.Y., held a procedural vote on Wednesday to test the GOP’s willingness to maintain its obstruction.
“If Republicans don’t step aside and let the Senate act now, our government is likely to default for the first time in its history,” he said.
Democrats blink and use the budget process
This remains an option for Democrats. But it would take longer. They are expected to revise the budget resolution for their multibillion-dollar economic package, hold an “a-rama vote” to authorize Senate amendments, and pass the same measure in both chambers before they can draft a limitation bill. debt.
President Joe Biden and Schumer rejected this path. Biden called this an “incredibly complicated and cumbersome process” on Monday. Schumer called it a “long, convoluted and risky process.”
Senate Minority Leader Mitch McConnell, R-Ky., Said this week that he called on Democrats to use the budget process months ago and that they should “get in motion.”
“The majority don’t need our votes,” he said. “They just want a bipartisan shortcut around procedural hurdles that they can overcome on their own.”
Democrats pierce filibuster
If Republicans maintain their obstruction, some Democrats have called for using the so-called nuclear option to change the rules and create a legislative exception to the ability to block an increase in the debt ceiling.
“I think we should be having this conversation,” Illinois Senate Majority Whip Dick Durbin told reporters.
“The idea that you can obstruct the debt ceiling is outrageous. It discredits to me the argument that obstruction is actually the way to get two-party politics. Baloney,” he said.
But that option would require the 50 Democrats. Schumer did not say Tuesday if that was an option.
Senator Joe Manchin, DW.Va., threw cold water on this idea on Monday.
“Filing has nothing to do with the debt ceiling. We have other tools that we can use. And if we have to use them, we should use them,” Manchin told reporters. “We can prevent the default.”
Senator Kyrsten Sinema, D-Arizona, another supporter of filibuster, did not respond when asked on Monday on Capitol Hill whether she wanted to use reconciliation to raise the debt ceiling.
A trillion dollar coin?
Some say Biden can fix the problem with executive action.
One idea is for the Treasury Department to mint a platinum coin worth $ 1,000 billion. Another is for the administration to invoke the 14th amendment say the debt limit is unconstitutional and continue to borrow to pay the country’s bills.
But White House press secretary Jen Psaki rejected both ideas.
“We are obviously looking at a range of options and none of those options were viable, either because they would not be accepted by the Federal Reserve, by the advice of our Secretary of the Treasury, or simply by legal restrictions,” she said on Monday. “So we know the only way forward here is through congressional action.”
Exceeding the debt ceiling
This is the doomsday scenario the Treasury Department warned against, setting October 18 as the calculation day that, without action, could trigger a financial crisis and plunge the economy into recession.
“Not increasing the debt ceiling would have catastrophic economic consequences,” says the ministry noted. “It would cause the government to breach its legal obligations – an unprecedented event in American history.”
Julie tsirkin and Frank Thorp V contributed.