Top Democrat Admits Congress Can Raise Debt Limit Through Reconciliation. How Would It Work?

House Majority Leader Steny Hoyer said Tuesday morning that Democrats in the Senate can raise the debt ceiling and fund the federal government through the budget reconciliation process.

“We may have to use reconciliation. I think that would be a sad statement of Republican responsibility,” he told reporters at the Capitol. The comments contradicted the position of top Senate Democrats, including Majority Leader Chuck Schumer and Whip Dick Durbin, both of whom have called the legislative maneuver a “non-starter.”

Hoyer quickly walked back his comments.

Raising the debt limit via reconciliation “is certainly not the best option, nor the option we’re pursuing,” he tweeted Tuesday afternoon.

Today I was asked whether reconciliation is an option to address the debt limit. It is certainly not the best option, nor the option we’re pursuing. Senate GOP are putting our economy & families at risk. They have a responsibility to the country to ensure the US does not default.

— Steny Hoyer (@LeaderHoyer) September 28, 2021

Senate Minority Leader Mitch McConnell has urged Democrats to use the reconciliation process, which allows bills to pass the Senate with 51 votes, to pass a debt limit increase. Without a funding package, the federal government would shut down for the fourth time in a decade. Without a debt ceiling increase, the federal government would default on its financial obligations by Oct. 18, according to Secretary of the Treasury Janet Yellen.

“Whose responsibility is it to do it? A Democratic president, a Democratic House, a Democratic Senate,” McConnell said of his position. “We have opposed virtually everything they’ve done this year. They’ve done it through two reconciliation bills, a rescue bill and now they’re trying to do it again. It’s their obligation. They should step up. It’s hard being in the majority.”

McConnell and Republican Alabama Sen. Richard Shelby introduced a bill Sept. 21 that would avoid a shutdown by funding the federal government, but would not raise the debt ceiling.

Punchbowl News’ John Bresnahan reported Tuesday that Congress is likely to avoid a federal shutdown by passing a funding bill. However, that legislation would not address the looming debt ceiling crisis.

In order to raise the debt ceiling by reconciliation, Democrats would have to move quickly. The budget reconciliation process is triggered by the passing of a budget resolution by the House and the Senate. That resolution assigns specific dollar instructions to be raised or lowered by various committees, according to the Brookings Institute. Once the resolution passes, Congress can pass legislation that directly addresses the specific dollar amounts. The whole process culminates in a “vote-a-rama,” an hours-long session in which senators can propose amendments to the bill on any topic. (RELATED: Democrats Want To Use Budget Reconciliation A Second Time. How Would It Work?)

“We could start the process over with a separate budget-reconciliation bill that is devoted to just raising the debt limit; the law allows us to do that,” House Budget Committee Chairman John Yarmuth, a Democrat from Kentucky, told reporters Sept. 22. “That’s a matter of weeks. So, you’re up against a potential deadline.”

During the budget reconciliation process, the Senate Parliamentarian plays a starring role. The parliamentarian is the Senate’s rules official, and under the Congressional Budget Act, they can rule that certain provisions that legislators want to include in a reconciliation package are extraneous or incidental to the budget, so they may not be included. However, the parliamentarian only issues rulings on whether or not a provision is relevant to a budget resolution when a senator challenges it. Since Republicans have called for Democrats to use the maneuver to raise the debt ceiling, they are unlikely to do so.

However, Senate Parliamentarian Elizabeth MacDonough will not be able to work over the next two weeks due to breast cancer surgery, complicating matters. During her sick leave, announced by McConnell and Schumer on Tuesday, deputies will fulfill her role.

Democrats passed a budget resolution in August in connection with President Joe Biden’s $3.5 trillion Build Back Better Act. Congress could include debt limit instructions alongside the funds allocated for the Build Back Better Act, but that would require Democrats to pass the bill before Yellen’s default date of Oct. 18. With Build Back Better Act negotiations flagging, Democrats may have to use the once in a fiscal year procedure to prevent a government default.

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