Debt Ceiling Plan Relies On Help By Republicans

Republicans leaders have declared for months that they will not vote with Democrats to raise the debt ceiling. Top lawmakers may have found a new way for Democrats to hike the borrowing limit before 15 December, the date when the Treasury will no longer be able to pay its bills.

The process would be complicated and is not free of risks. If the House and Senate can pull it off, Washington would quash the risk of a default that could wreak on the global economy and stock markets.

The strategy would tie the effort to raise the debt ceiling to a bill designed to prevent automatic Medicare spending cuts set to take place at the end of the year.

Lawmakers would pass a provision in the health-care bill that would allow the Senate to increase the debt ceiling one time with a simple majority vote.

Under the plan, at least 10 Republicans would be needed to vote to allow Democrats to hike the borrowing limit on their own. Then Democrats, who hold a majority in the 50-50 Senate through Vice President Kamala Harris’ tiebreaking vote, could raise the debt ceiling in a separate vote without GOP support.

Senate Majority Leader Chuck Schumer expressed confidence, on Tuesday, that Congress would stave off a default, without specifying how it would do so.

“Over the past few days we have made good progress on this issue and I’m optimistic that we will be able to prevent the awful prospect of the U.S. defaulting on its sovereign debt for the first time ever,” Schumer said on the Senate floor.

The proposal would offer some relief to both parties. Republicans would not have to vote for a debt ceiling increase. Democrats would not have to include a borrowing limit hike as part of the budget reconciliation process they are using to try to pass a $1.75 trillion social spending and climate package.

Hiking the borrowing limit does not authorize new spending. Treasury Secretary Janet Yellen has also noted Congress would have had to raise the debt ceiling regardless of whether Democrats passed spending bills this year.

As part of the strategy, Democrats would have to set a specific dollar figure for the debt ceiling, which Republicans could try to use as a political weapon.