Senate Majority Leader Chuck Schumer (D-N.Y.) on Thursday morning announced the Senate would move forward with a bid to raise or suspend the debt limit as soon as next week, doubling down on the urgency of avoiding the United States’ first default in history as Republicans continue to insist they’ll reject the measure.
On the Senate floor Thursday morning, Schumer said the chamber would vote on a House-passed bill to suspend the debt ceiling through mid-December of next year, though he also acknowledged it faces an uncertain fate given Republicans’ pledge to vote against it.
After listing out the multiple debt ceiling measures Republicans have blocked this week, Schumer warned the GOP risks causing “irreparable harm” to the nation’s economy every day they “continue their cynical obstruction.”
He also reminded lawmakers of the consequences “the last time Republicans played games with the full faith and credit of the United States,” referencing the 2011 debacle that led to credit agency Standard & Poor’s downgrading the nation’s sovereign debt rating and tanked the S&P 500 by 13%.
Citing concerns over wasteful spending and heightened inflation, Minority Leader Mitch McConnell (R-Ky.) said Tuesday there is “no chance” Republicans will help Democrats act on the debt limit, urging them instead to use a special budget procedure called reconciliation to pass the measure along one-party lines.
However, Schumer has repeatedly insisted reconciliation is out of the question, saying on Thursday the “drawn out, unpredictable process” risked taking too long and “needlessly endangering the stability of our country.”
“I’m asking Republicans to vote with us to solve the debt crisis they’ve created,” Schumer said Thursday before saying he would move forward with a vote with or without GOP support. “If [Republicans] want to oppose this measure and bring us closer to financial disaster, they can write their names in the history books as the Senators who let the country default for the first time ever.”
Republicans voted to suspend the debt limit three times under former President Donald Trump, most recently in 2019 with an overwhelmingly bipartisan vote.
According to the Treasury, Congress has either raised, extended or revised the definition of the debt limit 78 times since 1960, and it’s never failed to act on the debt limit when necessary. Still, Goldman Sachs warned in a note to clients this week that the uncertainty in Washington “looks riskier than usual,” and is starting to resemble the 2011 crisis that triggered a market correction. If the U.S. defaults, federally funded programs—including disaster relief efforts, Medicaid and infrastructure funding—could all be halted, the White House wrote in a letter last week. “Hitting the debt ceiling could cause a recession,” officials said, adding economic growth would falter, unemployment would rise and the labor market could lose millions of jobs as the federal government cuts off funding to state and local governments, forcing them to enact budget cuts to keep up with education and healthcare costs.
In Congressional testimony Thursday, Yellen said she thought it was “critical” for the debt limit to be raised on a bipartisan basis, though she also voiced support for getting rid of the debt limit altogether, noting it forces lawmakers to act on funds that have already been appropriated by existing law.
“There is no chance, no chance the Republican conference will go out of our way to help Democrats conserve their time and energy, so they can resume ramming through partisan socialism as fast as possible,” McConnell said Tuesday after rejecting Schumer’s bid to pass a debt ceiling measure without Republican support.