For better or worse, President Biden has assumed the reins and megaphone of this quarter’s fiscal debate. On infrastructure, reconciliation and the debt ceiling, the president’s language in the past three days has turned increasingly to the first person (“I believe I can get this done”). Having asked Speaker Nancy Pelosi to postpone a House floor vote on infrastructure, his traveling to Michigan today will bring Air Force One into the district of a House moderate Elissa Slotkin. A little Air Force One balm can soothe nerves.
Senate Majority Leader Chuck Schumer knows he can’t shame the GOP, but he has begun a process that could shield Senate Democrats from a horrible debt ceiling vote under reconciliation. The Senate will take up a message from the House, not a bill, that stripped all language from a Senate-passed bill (S. 1301) promoting physical fitness. The House’s message further suspends the debt ceiling until December 17, 2022. The message is privileged per Senate rules, meaning it could be concurred to by a simple majority vote in the Senate. We’re told this could require several procedural votes in which the Senate President (the vice president) would have to rule in favor of Schumer’s plan over opposition party objections (Senate Procedure, Floyd M. Riddick, Parliamentarian Emeritus, 1981).
Debt limit angst is a recurrent feature of what passes for intramural political football in town. Unlike the annual bipartisan baseball game, this contest isn’t designed to bring the two sides together – even for an evening. Both Senate leaders over the past weeks have pointed to Democrats having to manage legislatively without GOP votes on reconciliation and debt limit. S.1301 offers a vehicle to handle debt limit without forcing votes on Senate Democrats that would imply raising the debt limit is necessary to implement their stimulus plan before the 2022 midterms. The professional bipartisan, bicameral leadership staff is expert. If this route works, the result further validates the futility of outsiders, even those with some experience, second-guessing the legislative pros.
Treasury Secretary Janet Yellen during a CNBC interview this morning warned of catastrophic consequences should default occur, and firmed her view that October 18 is a deadline. Yellen appeared guarded when discussing the legislative path of the debt ceiling, declining to speak for Democrats’ management of debt ceiling legislation, encouraging them to do the job however possible. Her posture softened when asked about economics and banking topics such as whether M2 money supply was a chief source of current inflation expectations (she doesn’t), and tax compliance (which she views as a fair, effective way to collect what is owed by law). The secretary demonstrated unsurprising facility on a range of economic banking issues but understandably could not reassure that the debt ceiling drama will end well. We continue to believe it will. Leader Schumer’s legislative and schedule announcements point to more clarity within a week on how disaster will be averted.
