The House of Representatives has passed a bill to extend the borrowing limit through December 2022, but that bill faces a logjam in the Senate ahead of an expected procedural vote Wednesday.
Republicans have threatened to filibuster it. At least 10 GOP votes are needed to overcome that in the divided chamber. Democratic leaders say they should drop the filibuster and allow a vote, which would enable their 50 members to pass it on their own.
Republicans say Democrats should instead use a complicated budget process to raise the debt limit and enable the U.S. to pay its bills, which can be done without Republican support. Democrats disagree.
So far, neither side has budge. The Treasury Department has set an Oct. 18 deadline to tackle the debt ceiling or risk “catastrophic” economic consequences if the U.S. cannot pay its bills.
Here are five possible endinggames and their complications.
Republicans blink and allow a vote
The fastest way to resolve the issue would be for Republicans to back off the filibuster and let the Senate hold a vote at a simple majority threshold. Democrats could pass it with their 50 members and the tie-breaking vote of Vice President Kamala Harris. But only one senator can object to the “cloture vote” and force it. Sen. Ted Cruz (R-Texas) told NBC News that he would. It would then take 60 votes to overcome that. That means a minimum of 10 Republicans — and for now, there are no takers.
Senate Minority Leader Chuck Schumer (D-N.Y.) has scheduled a procedural vote to determine if the GOP will continue its filibuster. If Republicans don’t step in and allow the Senate to act now, our government is likely to enter default for its first time ever,” he stated.
Democrats blink and use budget process
This remains an option for Democrats. It would take longer. Before they could write a debt-limit bill, they would have to first revise their budget resolution for the multitrillion-dollar economic program.
President Joe Biden and Schumer have rejected this route. Biden called it “incredibly complex, cumbersome” on Monday. Schumer described it as “a long, complicated, convoluted, and risky process.” “
Senate Majority Leader Mitch McConnell (R-Ky.) said this week that he had urged Democrats to use the budget process several months ago and that they should get moving. “
” The majority doesn’t require our votes,” he stated. They just want a bipartisan shortcut to procedural hurdles that they can overcome on their own. “
Democrats pierce the filibuster
If Republicans maintain their filibuster, 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 a debt limit hike. I think we should have that conversation,” Dick Durbin (D-Ill.), Senate Majority Whip, said to reporters.
” It is absurd to think that you could filibuster the debt limit. This discredits the argument claiming that filibuster is the only way to achieve bipartisanship. He said, “Baloney.”
But that option would require all 50 Democrats. Schumer did not say Tuesday whether it’s an option.
Sen. Joe Manchin (D-W.Va.) shook off that idea Monday.
” The filibuster does not have anything to do with the debt limit. There are other tools we have. Manchin said that if they are necessary, they should be used. “We can prevent default.”
Sen. Kyrsten Sinema (D-Ariz.), another proponent of filibuster, didn’t respond Monday to a question at the Capitol asking if she would like to use reconciliation to lower the debt ceiling.
A trillion dollar coin?
Some say Biden can resolve the issue with executive action. One idea is that the Treasury Department should mint a platinum coin with a value of $1 trillion. Another is for the administration to invoke the 14th Amendment to say the debt limit statute is unconstitutional and continue borrowing to pay the country’s bills. But Jen Psaki, White House press secretary, dismissed both of these ideas.
” We looked at many options, but none were feasible, either because they weren’t accepted by the Federal Reserve by our Treasury secretary or by legal restrictions.” she stated Monday. We know Congress must act to move forward. “
Debt limit breach
This is the doomsday scenario the Treasury Department has warned of, setting Oct. 18 as the day of reckoning that, without action, could spark a financial crisis and plunge the economy into recession.
“Failing to increase the debt limit would have catastrophic economic consequences,” the department said. It would lead to the government defaulting on its legal obligations, a rare event in American history. “