J. Scott Applewhite/AP Photo
Monday is what Congressional reporters might call a “day of decision,” even though no decisions will actually be made.
In the House, Monday is the prescribed deadline for a vote on a Senate-passed infrastructure bill, with $550 billion in new spending over ten years. Twenty-one progressives have vowed to vote down that bill, because it would break the deal of enacting together both the infrastructure package and the Build Back Better Act, a public investment bill that represents nearly the entirety of the Democratic platform Biden ran and won on. A handful of Democrats who negotiated the infrastructure bill have stated vague objections to the Democratic platform, which has made it impossible to reach agreement.
House Speaker Nancy Pelosi, in a bout of optimism, has vowed to pass both the infrastructure and the Build Back Better Act this week. She instructed the Budget Committee to put together all of the elements of the bill that passed various committees in a markup on Saturday (here is that legislation). It could go to the Rules Committee as soon as today.
But this is a performative effort to show progress, without progress being made. Assembling the House BBBA at least creates a leftward pole in the debate. But Pelosi has promised frontline members in her caucus that she would not force them to vote on a bill that exceeds what can be passed in the Senate, and those discussions have barely started. Last Wednesday, Sen. Joe Manchin (D-WV) couldn’t even give President Biden a topline dollar amount he could accept for the package. Biden is forcing that conversation, finally bringing the Manchin Dems toward negotiating instead of posturing. But none of the hundred-odd decisions you would need for a consensus have been made.
Pelosi’s gambit is the kind of YOLO move you make when you have no other options, but the Biden agenda needs a breakthrough before it can move ahead for votes.
Last Thursday. Pelosi and Senate Majority Leader Chuck Schumer (D-NY) announced a “deal” on revenue pay-fors in the bill. I’ve been told that this created a menu of options, some from the House and some from the Senate, that could possibly be part of the revenue package. (It did not include provisions that create budget savings, like drug pricing reform.) But that deal clearly doesn’t cement what revenue measures will actually be in iterations of the bill, or how much they will bring in.
Witness the Senate Finance Committee trying to throw together a carbon tax and dividend over the weekend, because they think it’s all Sen. Kyrsten Sinema (D-AZ) will accept. Witness Biden touting an annual mark-to-market tax on unrealized capital gains for billionaires, because Sen. Ron Wyden (D-OR) whispered it to him at a meeting. There’s nothing close to a consensus on the tax side. Sinema reportedly even opposes rolling back the Trump tax cuts to raise the top marginal tax rate to 39.6 percent and increase the corporate tax rate above 21 percent, the easiest lifts in the entire package.
If the right wing of the caucus won’t agree to a spending figure, won’t agree to pay-fors, and won’t agree to anything else, it would be absurd for House progressives to assume enough progress to sign off on BBBA and infrastructure, only to watch the Senate grind down the former while the latter gets the president’s signature.
In a Dear Colleague letter Sunday night, Pelosi set the actual vote for the infrastructure bill for Thursday, the same day the surface transportation reauthorization that is attached to that bill expires. Some took this as a threat to whip progressives in line: vote for infrastructure or highway funding gets cut off. But this should all be seen as contingent on progress on the Build Back Better Act. Pelosi won’t put Build Back Better on the floor unless it has the votes; there’s no forcing mechanism available other than making a deal. As we will discuss in a moment, there’s another must-pass bill due that same day, Thursday, and any surface transportation extension can be stuffed into that if necessary. If progressives get a deal on Build Back Better they will vote for infrastructure. If they don’t, there are other ways to make sure highway funding doesn’t lapse, and everybody knows it.
Pelosi’s gambit is the kind of YOLO move you make when you have no other options, but the Biden agenda needs a breakthrough before it can move ahead for votes. That can only happen with actual negotiations to build trust and find something agreeable to all sides. Breakthroughs in Washington always come right after the threats, but it’s not going to happen overnight, and not by whenever Pelosi has scheduled it on her calendar.
In the Senate, meanwhile, there will be a vote late Monday afternoon on a House-passed bill to fund the government until the beginning of December, provide Hurricane Ida relief, allow for the resettlement of Afghan refugees, and raise the debt limit. The bill will get probably 52 votes (the senators from Ida-ravaged Louisiana will vote for it) and not pass, because Senate Minority Leader Mitch McConnell (R-KY) has made plain his desire to force Democrats to raise the debt limit on their own.
There’s no policy rationale to McConnell’s stubbornness; it’s mostly just a way to throw sand in the gears to stop the Biden agenda in whatever way possible. Of course, there’s no policy rationale to the debt limit either. It’s money already spent by the government that the country needs to borrow to finance.
Appetite for U.S. debt is high, and default is impossible in a country backed by its own currency. There’s just this stupid law, which is contradicted by another law (“the validity of the public debt of the United States … shall not be questioned,” so saith the 14th amendment) but which nonetheless has held up as tradition, that says you have to set a threshold of public debt to cover spending already incurred. Failure to do so would cause a catastrophic default and painful economic recession.
Setting this limit has never altered policy on spending in the history of the United States; it’s just a time bomb that Republicans like to light every time a Democrat takes the White House. Any Democrat shocked that Republicans wouldn’t cooperate on the debt limit after they cooperated under Trump needs to leave politics and find another line of work.
Democrats clearly prefer that both parties take responsibility for the debt limit, and they’d rather suspend it, which you can do under regular order, rather than setting it at a hard dollar amount, which is what you can do under reconciliation, and thus is perceived as a more politically fraught vote. I’d argue that no politician has ever lost their seat over a debt limit vote, but Washington has odd ideas about a lot of things.
Anyway, here’s what’s going to happen after Monday’s vote fails. Democrats would have until Thursday to pass the same government funding bill without the debt limit attached. Leadership has been clear that such a bill will pass by Thursday night. The Treasury Department can use its extraordinary measures to provide borrowing room until around the end of October.
Democrats can pass a debt limit hike with 50 votes through budget reconciliation. It’s just a bit of a pain to do it, because they didn’t put the debt limit in the original budget resolution instructions. They would have to amend that instruction, and spend a couple weeks on floor votes getting it done, while hoping that Republicans don’t boycott a key Budget Committee hearing so they can get the fix on the calendar.
Much easier solutions have been inexplicably ruled out. The White House has ruled out the Treasury legally minting a large-denomination platinum coin to cover the debt, or to just recognize a default on public debt as unconstitutional, which, given the 14th amendment, it arguably is. These are seen as “unserious” options, even though the debt limit itself is the least serious law in U.S. history.
It’s worth noting that Democrats could just end the legislative filibuster anytime they want and repeal the debt limit; “avoiding a self-own that sinks the country into an economic nightmare” sounds like a decent enough reason to do so. But if they have to go the reconciliation route, they can also neutralize it forever, by setting the debt limit to whatever number the national debt is at any given moment.
If McConnell is telling Democrats to fix the debt limit on their own, they should actually fix it by eliminating it. The debt limit serves no purpose, is not a brake on spending, and just allows for financing of existing obligations. No one way of putting it out of its misery is any better than the other. But the grave for the debt limit must be dug.
