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Republicans see opportunity in U.S. debt-ceiling standoff By Reuters


© Reuters. FILE PHOTO – An American flag is seen flying outside the U.S. Capitol dome, Washington, U.S.A, January 15, 2020. REUTERS/Tom Brenner/File Photo

By David Morgan

WASHINGTON (Reuters) – In a high-stakes standoff over the U.S. debt ceiling, congressional Republicans believe they see a chance to scale back President Joe Biden’s sweeping domestic agenda while boosting their odds of retaking Congress in 2022.

The Republican gambit passed an initial political test on Tuesday, when the House of Representatives voted 220-211 along party lines to approve a measure to suspend the $28.4 trillion debt ceiling and fund the federal government beyond Sept. 30, when the current fiscal year ends.

Republican Senate Leader Mitch McConnell made clear that the caucus which controls half of the chamber’s 100 members will vote against it. He wants to make the vote a referendum about a $3.5 billion Biden domestic spending plan, which the House and Senate will discuss in the coming weeks.

These are crucial issues. The stakes are high. Failure to pay federal agencies by Sept. 30, could cause the third partial shutdown in a decade. A failure to suspend the ceiling on debt by mid-October could lead to a historic default, which could disrupt financial markets or even trigger a recession.

McConnell and Senate Majority leader Chuck Schumer both used “catastrophic” to describe the consequences of a default.

“America must never default. McConnell stated to reporters Tuesday that we have never defaulted and will never do so again. As it has always been, the debt limit will be increased. It will however be increased by Democrats.

Although Republicans are insisting that they do not want to create a crisis in the first place, it could mean they can be somewhat protected from any default threat.

“The American people are going to say that I’m mad at everyone,” Senator James Lankford said to Reuters. “But I don’t know that it becomes the fault of the group that’s in the minority in the House, in the minority in the Senate and not in the White House.”

The Morning Consult poll from Sept. 18-20 showed 42% that registered voters would fault both the Democrats and Republicans equally for any default. Another 33% blamed Democrats, while only 16% blamed Republicans.

McConnell, along with his fellow Republicans, wants Democrats to suspend their debt ceiling through a parliamentary maneuver known reconciliation. Democrats already used this maneuver to pass the $1.9 trillion COVID-19 relief legislation and will use it again for Biden’s domestic spending plan.

Schumer claims that there is nothing to the debt-ceiling discussion with Biden’s agenda. He has also accused McConnell, “engaging in fantasal feats and sophistry.”

Without the suspension of the debt limit, it is likely that Treasury Department’s borrowing capacity will be exhausted by October. The Democratic bill would temporarily suspend government borrowing limits until December 2022.


Moderate Democratic Senators Joe Manchin and Kyrsten Sinema are objecting to the size of Biden’s proposed $3.5 trillion package, while House progressives insist they will reject anything smaller. Republicans argue that forcing Democrats into debt-ceiling suspension would further weaken their unity, and result in a smaller package.

There are many moderate Democrats in both the Senate and the House who are concerned about spending. The amount is staggering,” Senator John Thune said, who serves as the chamber’s No. 2 Republican.

Republicans see this debate as an opportunity to create a clear ideological divide between themselves and Democrats. Democrats are led, they say, by self-declared socialists like Senator Bernie Sanders or Representative Alexandria Ocasio Cortez.

It’s not about defaulting or temporarily hitting the debt ceiling. “It’s actually whether or not we’re willing to let them embed socialistism in the institutions of our Government,” Senator Kevin Cramer said to Reuters.

Some Republicans are afraid of being held responsible for the failure to vote and have suggested they might allow Democrats to approve that the funding measure and debt ceiling be passed with a simple majority. Ted Cruz, a Republican senator from Texas, vowed not to allow this route.

Other said their public opposition to the Biden agenda might help Republicans win the November 2022 election, which will decide the control of Congress.

When Thune was asked by reporters if the fight could help Republican candidates, Thune said, “Anytime there’s a fight about taxes and spending it’s great for Republicans.”