Video file

Citation From, October 7, 2021

RENUKA RAYASAM (HOST, POLITICO NIGHTLY): I’m here with Caitlin Emma, our budget reporter, to talk about the debt ceiling drama. So the showdown has been punted until December. But the question I have for you, Caitlin, for our very special debt ceiling edition of Three Minutes today, is why do they have to keep doing this every year? Why does Congress keep having to do this every year? So I’m going to start my timer and let you get going.

CAITLIN EMMA (POLITICO BUDGET & APPROPRIATIONS REPORTER): Well, that’s a great question, and every time we have this fight, you know, you have members of Congress who are saying, like, “This is ridiculous. Why do we have to keep going through this? Like, let’s just get rid of it.” And this is an option that Congress could do. They could just get rid of the debt ceiling. Or, you know, there are several options on the table. Like for example, House Budget Chairman John Yarmuth has suggested raising the debt ceiling to like this crazy, unattainable number, so that Congress doesn’t have to deal with it.

But basically, the debt ceiling as we know it kind of started its origins around like World War I, and it was meant to give the Treasury Department more control over the nation’s debt. But eventually that sort of evolved into this thing where Congress, not the Treasury Department, is the body that is in charge of periodically raising the ceiling.

So it becomes a political cudgel every time it has to be lifted. So that’s what we’re seeing now, you know. The last time it was raised, technically it was suspended two years ago by the Trump administration and congressional leaders. Suspending is like hitting pause on the issue, versus just like an outright increase to the debt limit. So, you know, once again, we’re in this position where Congress is basically using it as a weapon, and both sides are, you know, fighting over what they want, and you know, basically, it’s a mess. It’s always a mess.

RAYASAM: Is this a case — it’s always a mess — is this a case of neither side wanting to give up this political tool, this political weapon? Or is there something else going on here that’s more philosophical?

EMMA: Totally. Well, what’s really interesting about this particular fight is, you know, Republicans aren’t like demanding any sort of, like, you know, fiscal policy concessions. They’re not saying, like, you know, “We’ll only participate if you cut government spending by this amount.” Basically, what we have hanging over our heads is the 2022 midterms. So you have Democrats pursuing these multitrillion-dollar spending plans without Republican votes, through budget reconciliation. And that’s this special budget tool that they could also use to raise the debt ceiling.

But Democrats don’t want to do that, because, you know, they say it’s difficult, it's going to take a long time. It also requires the party, entire party, being comfortable with owning a new debt ceiling figure, which is ideally what Republicans want out of this. They want Democrats to say, “We’re going to raise the federal debt, you know, to this amount.” They want that party to own it, and then they want to weaponize it in the midterms. So, it’s sort of a fight that you kind of — a political fight you have going on in the background here.

RAYASAM: So we have 20 seconds left. Last question, why is McConnell, Mitch McConnell, so adamant that this go into reconciliation?

EMMA: Well, the reconciliation process would require them, in all likelihood, to own an outright increase to the debt ceiling. Versus, you know, a bipartisan suspension, like they call it, is far more common in recent years for both parties. That’s just basically hitting pause on the issue. And then when you hit the deadline, the debt ceiling is whatever it is. But McConnell really wants Democrats to own a number.

RAYASAM: We blew through our deadline, but we were only three seconds off. So we didn’t make it this time, but it was a really good effort. So thanks, Caitlin, for playing today.

EMMA: Of course. You’re welcome.