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Nobody Gives a Rat’s Ass Whether the Debt Ceiling Gets Folded Into Reconciliation

Leave it to Democrats to win a big political fight and then act as though they lost.

Senate Majority Leader Charles Schumer scratches his head as he attends a press conference.
Kevin Dietsch/Getty Images

In victory, it’s advisable to be magnanimous. This sentiment, typically attributed to Winston Churchill (it’s in the frontispiece to his multivolume History of the Second World War), is understood to be a moral imperative, but it’s also a strategic one. Magnanimity in victory is strategically wise because, if you don’t act like you won, people may get the idea that you lost. Behaving magnanimously is a useful way to persuade people that you won—which is almost as important as the winning itself.

I offer this Machiavellian advice because congressional Democrats fail to grasp it. Senate Minority Leader Mitch McConnell cried “uncle” Wednesday on the debt ceiling. That should have prompted the Democrats to claim victory. They should have stroked their chins and praised McConnell condescendingly for coming to his senses. But the Democrats didn’t do that. Instead, they mostly set about insisting that they didn’t cave, which of course made it look as though they lost. Even though—let me emphasize—they didn’t lose. They won!

Allow me to provide a little background.

For the longest time, McConnell refused to help the Democrats raise the debt ceiling. He did this for infantile partisan reasons, and also because he wanted to force the Democrats to put the debt ceiling into the $3.5 trillion “Build Back Better” reconciliation bill, which can’t be filibustered. Forcing this outcome might have compelled Democratic leaders in the House and especially the Senate to make hurried, overly generous concessions to conservative Democratic holdouts on the reconciliation bill like Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona. That’s because the deadline for lifting the debt ceiling, according to Treasury Secretary Janet Yellen, was October 18.

McConnell’s strategy failed. Let me say that again: It failed. He failed. The Republicans failed. The whole thing was a big … failure.

McConnell’s strategy failed because people were starting to notice that the Republicans were playing Russian roulette with the economy. If the debt ceiling weren’t lifted, the Treasury would default on the various bonds, notes, and bills that it must float to cover the nation’s bills. Taxes aren’t sufficient to cover those bills because the budget has been in deficit for 20 years, through Democratic and Republican administrations alike. (The last president to balance the budget was a Democrat, Bill Clinton; under Donald Trump, the deficit topped out north of $3 trillion, more than three times Barack Obama’s worst deficits in the aftermath of the 2008 financial meltdown.) If the Treasury defaulted on its financial obligations, the U.S. economy would go into free fall. In the absolute best-case scenario, there would be a recession.

McConnell was trying, through intransigence, to communicate that the debt ceiling showed that Democrats were bankrupting the country with their wild spending. In fact, as TNR’s Grace Segers has pointed out, most of the debt that necessitated the debt ceiling increase was incurred by Republicans, not Democrats—through Trump’s insane multitrillion-dollar tax cuts in 2017 and through Covid relief that President Donald Trump signed into law in 2020 and 2021. But the larger point was that the money was spent already. Now it was simply a matter of paying the bills, and McConnell was behaving like a deadbeat.

A lot of news outlets failed to make this sufficiently clear because they didn’t want to look like they were taking sides. But the point got through anyway. It got through especially to Wall Street, which had a very jittery past week, which in turn made Republicans jittery, too. The GOP sometimes pretends that it’s anti-corporate, but the party remains infinitely more beholden to banks and corporations than the Democrats. Consequently, just as Senate Majority Leader Chuck Schumer was preparing a vote to put Republicans on record, yet again, against raising the debt ceiling, McConnell offered Schumer some alternatives, of which the most appetizing was a lifting of the debt ceiling by $480 billion, which is expected to keep the Treasury solvent until December 3, at which time it will have to be lifted again. Enough Republicans (11) followed McConnell’s lead Thursday night to pass the temporary measure.*

When McConnell surrendered, did Democrats voice the magnanimity of the true champion? They did not. Did they take the lower but still-triumphant option of spiking the football and performing an end-zone dance? A few did do that, including Senators Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont (an independent who caucuses with the Democrats). Mostly, though, the Democrats insisted that they will never, ever give in to McConnell’s demand that they fold the next deficit ceiling vote into the reconciliation bill. Not ever! “There’s not going to be reconciliation,” Sanders said (by which he meant, for the debt ceiling). “Never,” said Senator Tammy Duckworth of Illinois. “Political games,” scoffed Senator Chris Murphy of Connecticut.

Um, why not?

The reason not to include the debt ceiling in the reconciliation bill was that there wasn’t time. Now the Democrats have two months. Another reason Schumer cited was that it would be too complicated to do as a practical matter. But actually, Punchbowl News has reported, the Senate parliamentarian told the Democrats it isn’t complicated at all; you just move a debt-limit budget resolution through the Budget Committee that says you’re going to raise the debt limit, and then you add the debt-limit increase to the reconciliation bill. The main difficulty is that it takes a long time to jump through these procedural hoops, as Ed Kilgore noted in New York. Now that obstacle is removed.

As I’ve written elsewhere, the reconciliation bill is going to pass, one way or another. It will have to be trimmed, probably to $2.5 trillion. I’ve proposed a few ways to get there that (if I may be so vain) are much better than many ideas I see congressional Democrats proposing in the newspapers. But I digress. The point is that eventually Manchin and Sinema will sign on, if only to get the infrastructure bill passed. At that point, why not fold the debt limit into reconciliation? McConnell has said that he’ll furnish Republican votes for the interim debt ceiling bill, but not for the real one in December. If the reconciliation bill by then looks like a done deal, that will make McConnell less willing to be helpful, not more. So reconciliation may very well be the only vehicle to raise the debt ceiling.

It’s hard to understand why Democrats remain stubbornly opposed to putting the debt ceiling increase into reconciliation. One reason may be that they think they can pressure McConnell into furnishing bipartisan support to raise the debt limit in December. If so, that’s a pipe dream. Mainly, it seems Democrats continue to oppose putting the debt ceiling into reconciliation to show McConnell can’t push them around. But their pouty resistance doesn’t make them look like winners. It makes them look like losers.

Will a single Democratic House member or senator run a political ad next year in which he or she gives the camera a hard stare and says, “When the Republicans wanted to fold the debt ceiling into reconciliation, I said no!”? Of course not. You’d do as well to run an ad in which you speak Maltese.

The only real obstacle I see is that once a reconciliation bill is agreed on, it may not be 100 percent certain that Sinema is … there’s no nice way to put this … sane. She hasn’t been around long enough for us to know. Manchin is conservative, but he isn’t insane. If he cuts a deal, he won’t change his mind later and threaten to bankrupt the country unless he gets additional concessions. Sinema probably wouldn’t do that, either. But we can’t feel completely certain about that. If Sinema cuts a deal with Schumer on reconciliation, Schumer may have to say, “Renege on this agreement, Kyrsten, and your next internship will be at the Fresh Kills landfill,” or whatever it is congressional leaders say to get troublesome legislators in line.

To return to Machiavellian reasoning, or game theory, or whatever you want to call it: The Democrats probably have to put the December debt-limit increase into the reconciliation bill, and it isn’t smart politics to say you won’t do something if in the end you will. By saying, “We will never put the debt limit into the reconciliation bill,” the Democrats give who’s-up-who’s-down pundits like Chuck Todd of NBC’s “Meet the Press” an opportunity to portray a December reversal as a political defeat and publications like Politico an opportunity for the headline, “In Setback, Dems Bow to McConnell on Debt Ceiling.”

Why would they want to do that?

Why especially would they do that when the real story is that they won?

* This article has been updated.