As I’m sure you’ve seen, the debt ceiling is in the news again as President Elon Musk and VP Donald Trump try to figure out how to lead the incoming kakistocracy. We thought it would be helpful to explain the issue and the negotiations around it, if you’re looking for some light reading as you finish up your holiday shopping.
Donald Trump wants Congress to pass an extension of the debt ceiling before he enters office, and has pushed House Republicans to include it in their efforts to pass a funding bill. Trump hasn’t only said he wants it extended, he’s indicated that he’s open to eliminating it entirely.
It now looks like House Republicans are trying to pass a third version of a continuing resolution that would not include a debt ceiling extension, and instead plan to handle the debt ceiling in the spring. It’s unclear how Trump will handle this news, or if that effort will pass.
While we don’t know whether it’ll come up tonight, in a few days, or a few months, questions around the debt ceiling are likely to fall to Democrats, since Republicans lack the votes to pass it on their own.
Here’s our message to them: agreeing to a short-term extension would be a huge mistake for Democrats. They should vote ONLY for elimination or its equivalent (a de facto repeal, like a 40-year suspension).
Abstaining from a vote on a short-term debt ceiling increase is a low-danger, high-upside play. From a historical perspective, there is zero risk of a default crisis in a GOP trifecta, and good reason to think that will be true again.
Short of reconciliation, when cuts to programs we care about will already be on the table as pay-fors, there is no way for Republicans to raise the debt limit without Democratic votes, and that means both significant leverage for Democrats and very little risk of a ‘grand bargain’ that raises the limit with cuts.
If there is congressional dysfunction and inaction, it’s impossible to believe Donald Trump won’t simply ignore the debt limit altogether. (Hell, avoiding default through unilateral executive action might be the most constitutionally sound thing he does all four years!)
The debt limit is the single biggest threat to everything we work for and this is our best chance to eliminate it for good. We spend a lot of time as a movement worrying about deficit commissions, but no modern deficit commission has ever resulted in any spending cut—at least not in this century.
Rather, the biggest spending cuts (to both mandatory and discretionary funding) have come under Democratic presidents during default crises triggered by Republican hostage-taking over the debt limit: the 2011 Budget Control Act and the 2023 Fiscal Responsibility Act. Eliminating the debt ceiling entirely would take these default crises off the table, and give future administrations more leeway to govern without negotiating with legislative hostage-takers.
In contrast, a deal to raise the debt ceiling for a few years would put us right back where we started, with Trump given free rein to blow up the deficit without giving Democrats any concessions, while a new, potentially Democratic Congress/President would be left to once again deal with this ridiculous self-imposed problem.
This should be an obvious choice for Democrats: they have leverage now, and they need to use it, instead of rolling over without a fight like they all too often do. There should be no Democratic votes for a deal that includes a temporary debt ceiling increase, period.