The debt ceiling stare down
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Illustration: Aïda Amer/Axios
Congress is fast approaching its deadline to raise the debt ceiling or risk defaulting on the nation's debt, and, as of now, there's no serious plan to stave off what many members are calling the worst-case scenario.
Why it matters: The U.S. has never defaulted on its debt. If Congress doesn't take "extraordinary measures" to finance the government, it would "likely cause irreparable damage to the U.S. economy and global financial markets," Treasury Secretary Janet Yellen warned last week.
Driving the news: Democrats are banking on at least 10 Republicans to eventually give in and vote for a debt increase.
- But Republicans insist they're not bluffing and have remained united in their insistence that if the U.S. defaults on its debt, the blood will be on Democrats' hands.
- “It's their obligation. They should step up. It's hard being in the majority. They are the ones who will raise the debt limit,” Senate Minority Leader Mitch McConnell (R-Ky.) told Punchbowl News.
What we're hearing: Axios spoke with more than a dozen senators this week about how they think Congress should handle the stalemate.
- Democrats largely told us they think Republicans are willing to get as close to the deadline as possible but then will fold after banks, lobbyists and donors call them.
- "Oh come on, they're not gonna let us default," said Sen. Chris Coons (D-Del.). He said he and his Democratic colleagues think the most likely scenario is Republicans "fuss, fuss, fuss, then do it" in a continuing resolution.
- Some Republicans, though, said they're willing to let a default happen and blame it on Democrats.
- "It's going to be entirely determined by the Democrats," said Sen. Susan Collins (R-Maine), one of the few moderate Republicans usually willing to break with her party. "They are the ones whose actions are making the increase in the debt limit necessary."
What they're saying:
- Coons: "We came right up against [default] once," referring to a 2013 clash. "And the amount of input senior Republicans got from the financial community, I mean, this would be catastrophically foolish."
- Sen. Kevin Cramer (R-N.D.): "I've seen nothing but resolve on the parts of Republicans. ... It'd be really, really, really difficult for Democrats to get Republicans to help them raise the debt ceiling under any circumstance right now ... even if it leads to a government shutdown."
- Sen. Cynthia Lummis (R-Wyo.): "I am a 'No,'" regardless of whether a no-vote means the government defaults on debt.
Between the lines: In the coming weeks, Democrats plan to lean even harder into their argument Republicans should give in because Democrats raised the limit by trillions of dollars during the Trump administration for COVID-19 relief.
- Many Republicans say they don't care if Democrats accuse them of a double standard.
- They argue spending on pandemic relief is very different from funding Democratic plans to spend trillions on Biden's progressive policy agenda.
- "That's like us voting for their [$3.5 trillion] program, if we open the door for them to do it," Sen. Chuck Grassley (R-Iowa), a member of the Senate Finance Committee, told Axios.
