Top Republicans differ on strategy to handle debt limit deadline: Demand reforms or just say no?

Senate Minority Leader Mitch McConnell of Ky.

 

 Mitch McConnell of Ky., departs after speaking with reporters after a Republican caucus luncheon on Capitol Hill, Tuesday, June 8, 2021, in Washington. (AP Photo/Alex Brandon) (AP Photo/Alex Brandon)

"Republicans have been consistent in saying we need to institute spending reforms before we increase the debt limit," Banks told Fox News said Thursday. 

"So it’s Democrats who are setting up this game of chicken. Voters know we can’t continue on our current path. Even 49% of Democrats agree we need to end continuous deficit spending," Banks added. "So it is incredibly important for Congress to heed this wake-up call and stop reckless spending before the consequences of inflation get even worse."

Those comments came after Politico reported Wednesday that Democrats might not include a debt limit increase in their reconciliation package. Instead, according to the report, Democrats would try to get 10 Senate Republicans to join them in raising the debt ceiling under regular order in the Senate. 

That's not acceptable to McConnell. He says he wants Democrats to take responsibility for increasing the debt limit because they are the ones currently proposing massive debt increases.  

"Oh, when the bill comes, they say it's time to split the check," McConnell said. "If our colleagues want…spending and debt to be their signature legacy, they should leap at the chance to own every bit of it."

But House Minority Leader Kevin McCarthy, R-Calif., appears to be on the same side as Banks, who put out a memo earlier this year saying Republicans should use the debt limit to "force action on our nation's spending problem."

"I think Democrats should put in reforms," McCarthy said when asked about the debt ceiling last month. 

There was even mixed messaging even among Senate Republicans this week. 

"We're looking at conditions that we would want to put on the raising of the debt ceiling," Sen. Kevin Cramer, R-N.D., said on Fox Business' "Making Money" this week. "We need to see some structural changes."

But House Minority Whip John Thune, R-S.D., had different comments Wednesday. 

"They're the ones that are adding to it, and they ought to do that under their 51 vote majority," Thune said. "I can't think of a single Republican who wants to help them do that."

McConnell Thursday didn't seem infatuated with the idea of any GOP engagement on the debt limit – even to demand spending cuts – and is unlikely to push for such a strategy. 

Rep. Jim Banks, R-Ind., appears on Fox News. Banks wants Republicans to try to extract fiscal reforms from Democrats in exchange for raising the debt ceiling. (Credit: Fox News)

"I could not be more clear," McConnell said. "They have the ability. They control the White House, they control the House, they control the Senate. They can raise the debt ceiling, and if it’s raised, they will do it."

If there is any disagreement among congressional Republicans on how to handle the debt limit, it's likely that McConnell's strategy will win out. Senate Republicans are the ones who wield the filibuster, and appear confident there won't be enough defections on a vote to raise the debt ceiling to break one. Democrats can simply steamroll Republicans in the House. 

Democrats have not announced a final plan on how they will handle the debt limit and could still include it their reconciliation package. A spokesman for Sen. Chuck Schumer, D-N.Y., did not return a request for comment Thursday. 

A 2019 suspension of the debt ceiling expired earlier this summer, setting the nation up to default on its debt sometime this fall if Congress doesn't take action. The consequences of a default would be dire for the economy, including soaring interest rates. 

Republicans, despite their talk now of fiscal responsibility, also significantly contributed to the national debt when they were in power. The deficit during former President Donald Trump's presidency increased significantly compared to when former President Barack Obama was in office. This was true even before the pandemic.

Notably, Democrats could theoretically pass standalone legislation increasing the debt limit without GOP votes. The parliamentarian earlier this year said they can revisit an old budget reconciliation package and add to it. 

This means that even if Republicans convince moderate Democrats to vote against their party's massive spending package, Democrats could still unilaterally raise the debt limit.