May 3, 2023 - Politics & Policy

Lawmakers spy opportunity in debt ceiling crisis

Sen. Tim Kaine. Photo: Drew Angerer/Getty Images

Senators in both parties are looking to the latest partisan standoff over the debt ceiling as a potential catalyst for long-term reform of the process.

Why it matters: Perennial brinksmanship has left lawmakers seething about having to repeatedly scramble to fend off a catastrophic default.

  • “I think providing a more reliable mechanism would make a lot of sense,” said Sen. Thom Tillis (R-N.C.).
  • Senate Banking Committee Chairman Sherrod Brown (D-Ohio) told Axios: “I wish we didn’t have to do this.”

Driving the news: Sen. Tim Kaine (D-Va.) and Jeff Merkley (D-Ore.) have introduced legislation that would have the president set the debt limit each year, giving Congress the ability to block it through a resolution of disapproval.

  • Kaine told Axios they are considering bringing the measure to the floor in the coming weeks to try to pass it via unanimous consent, a long-shot effort that can be derailed by just one senator objecting.
  • "We need to quit playing games ... [and take] this brinksmanship off the table," Kaine said of his bill, adding that it is one of “many things we might try this month.”

What they're saying: Senate Democrats across the caucus voiced firm support for a raft of potential reforms.

  • Trump-state Sen. Jon Tester (D-Mont.) said "a couple" proposals make sense — including Kaine's bill and another to set the debt ceiling in the annual budget.
  • Progressive Sen. Brian Schatz (D-Hawaii), who has introduced legislation to repeal the debt ceiling, told Axios: "I think [Kaine's bill] is fine too. But I just think we should repeal it."
  • "Anything to avoid putting the country through this," said Brown, another Trump-state Democrat. "Because this clearly does some damage. Even at this stage, it's starting to do some damage to the country."

What to watch: The explosive stalemate over the debt ceiling currently underway could propel a new wave of efforts to try to defuse future conflicts before they can occur.

  • "Every time we get close to default, people start asking those questions," Senate Majority Whip Dick Durbin (D-Ill.) told Axios.
  • “The crisis that occurs every 12 or 18 months is just not good,” said Tillis, adding that it would be “wise to consider” reform.

Between the lines: "If I were China and I were trying to convince ... other countries to reconsider the dollar as the reserve currency," Tillis said, "What we're going through right now would be one of the things I use to pitch it."

The big picture: Tillis isn't the only Republican expressing openness to reform when the dust from the current crisis clears.

  • "I'm all for sitting down with my Democratic and Republican colleagues and talking about some debt ceiling reform," said conservative Sen. John Kennedy (R-La.).
  • Sen. Jerry Moran (R-Kan.) told Axios he is "open to hearing ideas of how we might do that. ... I'd have to see how that all worked."
  • "Is there another way to do it? Maybe. I'm open to [it] if people have suggestions about that," said Senate Minority Whip John Thune (R-S.D.), "It does seem unnecessarily complicated."

The backdrop: Bipartisan compromise on this issue wouldn't be unprecedented.

  • A group of 10 Republican and three Democratic senators, including Kaine and Kennedy, proposed legislation in 2019 to have the debt ceiling set by the budget.

Yes, but: Some Republicans, including Thune and Moran, told Axios they also see some value in the current process.

  • "I think it's important that we go through this process fairly regularly," said Sen. Kevin Cramer (R-N.D.). "The debt ... is the one trigger that forces a comprehensive discussion about [spending]."
  • Others, such as Kennedy, said any reform discussions will likely have to wait until after the current crisis is resolved.
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