The debt ceiling deadline is the end of July — Democrats have options, but no clear plan yet

There’s a third option: Instead of raising the debt ceiling, Democrats could try to suspend the limit for another year, either through a stand-alone vote or as part of an unrelated  bill. 

The upside here? Avoiding a tough vote to increase the limits on the federal debt, made all the more difficult by Democrats’ meager majorities.

The downside? A one-year suspension would need to pass both chambers, and the Senate’s 60-vote threshold means Republicans could hold up the bill’s passage until they win concessions from Democrats on any number of other issues.

Asked to comment on this story, a spokesman for Senate Majority Leader Chuck Schumer, D-N.Y., referred CNBC to remarks the senator made in May.

“You know, I think it’s an absolute disgrace that the Republicans are using the debt ceiling, which deals with the financial security, as sort of a political issue,” Schumer said at the time. “We should get something done in the right way.”

A spokesman for the House speaker’s office did not reply to CNBC’s request for comment.

The vote isn’t a cakewalk for Republicans, either. While Democrats often face criticism for spending, members of the GOP are vulnerable to similar attacks from challengers in their own party during primaries. 

“There are many Republicans who are looking over their shoulders,” said Block, the Fundstrat policy strategist. “They know they run the risk of a Republican opponent in a primary winning against them as an irresponsible spender.”

Representatives for Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader Kevin McCarthy, R-Calif., did not immediately respond to CNBC’s request for comment.

Block is betting that Democratic leadership will try to include the debt ceiling provision in a large bill, such as the current infrastructure deal. 

That approach, he said, not only allows Republicans to save face by offering them a reason to vote for it, but it puts pressure on progressive Democrats who may otherwise demand even more from an infrastructure plan that excludes funding for climate change or social programs.

“It’s just really difficult to put the obvious structural essentialities of increasing this to the politics of your member” of Congress, Block said. “Almost every staff member’s primary concern is getting their member elected, saving their job.”

— Thomas Franck reported from New York, and Christina Wilkie from Washington.

Article source: https://www.cnbc.com/2021/07/09/debt-ceiling-2021-democrats-have-options-but-no-clear-plan-yet.html