Raise the Roof—Or Raze It?

As Congress seeks to raise the debt ceiling some are wondering: Why have the debt limit at all?

Published December 7, 2021

Good afternoon from Capitol Hill, where progressive groups led by ShutdownDC forced cars to idle across Washington this morning to promote, among other things, action on climate change.

Raise the Roof

When debt ceiling talks start up in Congress, the collective eye roll from staffers, reporters, and members of Congress is so large that some say it’s measurable on the Richter scale.

We’ve written about the debt limit before, and the story this time around does not stray too far from the typical outline: The two parties are fighting over how Congress will ultimately increase the debt to avoid a catastrophic credit default.

Earlier this year, Republican lawmakers initially refused to give their votes for raising the debt ceiling, arguing Democrats should have to do it on their own through the budget reconciliation process. Democrats refused, culminating in a last-minute agreement to raise the limit for two months. The conflict is back in the spotlight: Treasury Secretary Janet Yellen wrote to Congress in November that December 15 is the date the country could begin to default on its debt, although the Treasury Department’s measures could last longer than that in practice.

This time around, Senate Republican leaders appear to be working more closely with Democratic leaders to avoid a default. Minority Leader Mitch McConnell is reportedly negotiating with Majority Leader Chuck Schumer to find a way to pass the debt ceiling hike with just 51 votes in the Senate—a method other than the reconciliation process, which Democrats do not want to use because it would involve lengthy debate requirements and amendment votes.

“The country is never going to default,” McConnell said at a Wall Street Journal event last night. “We frequently have drama associated with this decision, but I can assure you the country will never default.”

The McConnell-Schumer plan would require a new law to allow the debt ceiling to be addressed with a simple majority. That law would still need 60 votes in the Senate to overcome a GOP filibuster—meaning 10 Republicans would have to support raising the debt ceiling indirectly. The House is expected to send legislation to make the change to the Senate this week. Bill text was released this afternoon, available here.

Schumer said this morning that over the past few days, leaders “have made good progress on this issue, and I am optimistic that we will be able to prevent the awful prospect of the US defaulting on its sovereign debt for the first time ever.”

The procedural games are playing out largely with voters in mind: Republicans know it would be toxic to support suspending the ceiling as Democrats are still debating President Joe Biden’s sweeping Build Back Better Act.

“Republicans are very clear: They just want the political cost of raising it to fall on the majority party because that’s part of the cost of being the majority party,” Phillip Wallach, senior fellow and congressional studies expert at the conservative American Enterprise Institute said. “It’s so nakedly opportunistic.”

Some lawmakers and experts are increasingly wondering: Why have the debt limit at all?

Eliminating the debt ceiling, or at least reforming it somehow, has been discussed by everyone from McConnell to House Speaker Nancy Pelosi, to JPMorgan Chase CEO Jamie Dimon.

Democrats have introduced bills in both the House and the Senate with the goal of reforming the debt ceiling or sometimes just doing away with it completely. McConnell, back in 2011, floated an idea that would give the president more power in controlling the debt limit rather than leaving it to Congress.

In September, a group of House Democrats introduced legislation called the Debt Ceiling Reform Act that would have given the treasury secretary authority to increase the debt limit as they see fit. So far no action has been taken on the bill.

There are also some interesting, long-shot ideas from lawmakers on how to deal with the perennial problem.

House Budget Committee Chairman Rep. John Yarmuth suggested to reporters during the last debt ceiling negotiations that Congress either do away with the limit completely or raise it by “a gazillion dollars.” Some don’t think gazillion is an actual number, but just to give you an idea of how big that might be, the number centillion has 303 zeros.

While raising it by that much is highly unlikely, the idea of raising it well above the current level of spending is what Denmark—the only other Western country in the world to have a debt ceiling—did in 2010 when its spending reached 75 percent of the limit. Instead of a series of incremental increases like the U.S. does, Denmark doubled the limit and has yet to come close to it again.

Another idea that has been seriously discussed for more than a decade is minting a platinum, $1 trillion coin. Federal law allows the treasury secretary to mint coins of any amount of money, and in the debt ceiling debates of 2011 and 2013 this idea started to pick up steam. The idea is simple: Mint the coin, deposit it in the Federal Reserve, and the government continues to function.

Rep. Jerry Nadler of New York has been a big proponent of this idea, and in late September Rep. Rashida Tlaib renewed the calls to mint the coin.

The chances of a long-term fix to remove the debt ceiling from Washington’s list of perennial problems remain low for now, while Congress is closely divided between the two parties in both chambers.

The Dispatch spoke with a handful of Republican House members last week, all of whom were opposed to getting rid of the debt ceiling mostly because it brings attention to the nation’s growing debt.

“It forces negotiations for ways to reduce the debt,” Rep. Dan Crenshaw told The Dispatch. “It’s annoying, but it has in the past forced those kinds of negotiations.”

Build Back Better Details, Continued

The Uphill team has been going through the Build Back Better Act, publishing a series of newsletters focused on various topics addressed in the legislation. Our coverage isn’t comprehensive, but it is more detailed than you’ll find in most news articles. If you want to read more, the full text of the bill is available here, and a section-by-section summary is available here.

We covered many of the package’s climate provisions here, its health care and housing provisions here, and its immigration and family policies here. Last week, we looked at a grab-bag of sections, including taxes, technology, and cybersecurity. This week, we’ll focus on some of the bill’s physical infrastructure components.

Access to affordable housing: Leading off this section is $9.75 billion through September 2026 for projects to boost access to affordable housing and mobility for work, health care, educational institutions, and grocery stores in disadvantaged communities.

Eligible activities under the bill include construction of bus rapid transit projects, acquisition of zero-emission vehicles for service in urban areas, expansion of bus routes, and renovation or construction of facilities related to transit in disadvantaged communities. $150 million more would go to grants for research and training to promote the use of zero-emission vehicles, and $100 million is included for oversight of the grant money. The grants would be disbursed by the Department of Housing and Urban Development and the Federal Transit Administration.

Low-income neighborhood access grants: The bill includes $2.37 billion for the Federal Highway Administration to distribute grants to states and localities for a wide range of activities to improve transportation access and safety. An additional $1.58 billion is set aside for grants to low-income communities. The bill lays out guidelines for what the money can be used for, but here are a couple of examples: “provide affordable access to essential destinations, public spaces, or transportation links and hubs,” replace facilities that are not up to code, “to build or improve complete streets, multi-use trails, regional greenways, or active transportation networks or spines,” improve walkability, more. Also in this section are directions on how the money can be used for projects to reduce air, noise, and water pollution caused by transportation-related construction.

Territorial highway projects: It’s not just states that are in on the BBB action: U.S. territories are also set to receive over $320 million through September 2026 for highway projects.

Traffic safety: $47.5 million would go to the National Highway Traffic Safety Administration to award grants to operate a national clearinghouse for traffic safety enforcement, to study traffic enforcement data, develop best practices for states to use the data, and to develop educational programs to promote the findings of the research.

Enforcement of FEMA codes: $145.5 million would go to FEMA to assist state, local, tribal, and territorial governments to update buildings to align with the latest codes and hazard resistant standards. The costs of projects pursued under these grants would be 100 percent covered by the federal government, without a cost-sharing requirement for recipients.

Economic Development Administration (EDA): The EDA would see a large influx of federal funding in the current form of the BBB. The bill provides $3.36 billion through September 2031 for grants to improve regional economies. An EDA presentation indicates this money would be used for workforce development programs to support the needs of industries, giving assistance to entrepreneurs, and investing in regional infrastructure. This section sets aside $1.2 billion more for grants to low-income areas, aiming to “alleviate economic distress and support long-term comprehensive economic development and job creation in persistently distressed local labor markets and local communities.”

$240 million in grants is set aside for assistance to “energy and industrial transition communities, including oil, gas, coal, nuclear, and biomass transition communities, and manufacturing transition communities.”

Coast Guard: The U.S. Coast Guard is set to get 650 million through September 2031, for the purchasing, designing, building, or updating of facilities to be climate-resilient.

Apparently, the Great Lakes need an icebreaker and the classic “two-truths and a lie game” isn’t going to cut it. $350 million has been set aside for the acquisition, design, and construction of a Great Lakes heavy icebreaker. What even is an “icebreaker?” Exactly what you think it is. It’s a ship in the Coast Guard fleet designed to break ice. According to Business Insider, there is only one heavy icebreaker in the U.S. fleet, and that one is falling apart. However, the one planned in BBB would be for the Great Lakes, which already has one: the USCGC Mackinaw.

Supply chain resilience: Some may argue this funding is too little too late, but the BBB includes $600 million through September 2026 allocated to the Maritime Administration for grants and projects to support and study U.S. ports and reduce port congestion.

Water: $125 million is set aside for the Environmental Protection Agency to pursue alternative water production projects, with two caveats: The projects must maximize the mitigation of climate change on the project and whatever steel or iron is used must be produced in the United States.

The EPA would also receive $1.85 billion for grants to address sewage overflow and stormwater reuse. $1.35 billion of that is dedicated to economically distressed areas of the country and Native American tribes.

$150 million is dedicated to updating wastewater treatment systems for individual households, and half of that is allocated to households that are not connected to a system or do not have the technology to deal with sewage.

Environmental review Implementation: $50 million is allocated to the Federal Highway Administration to support environmental reviews of new projects within the administration’s jurisdiction.

Low-Carbon Transportation Materials Grants: $900 million would go to the highway administration for grants to assist entities for using low-carbon construction materials, reimbursing recipients for the difference between the cost of traditional materials and the higher cost of low-carbon materials. Eligible projects include those associated with federal-aid highways, tribal transportation facilities, and federal lands access and transportation facilities. The funds are also prohibited from being used for projects that would increase lanes for single-passenger vehicles.

Economic aid on the border: $33 million through September 2031 is set aside for the Southwest Border Regional Commission. At first glance, this may seem like border enforcement funding, but that’s not the case. The SBRC, according to the Congressional Research Service, aims to help with economic distress along the southwest border, in Arizona, California, New Mexico, and Texas.

On the Floor

The Senate will consider several executive nominees this week, as members from both chambers work on a final agreement for the annual defense authorization bill. Senators are also expected to vote on a resolution to disapprove of President Biden’s first major arms sale to Saudi Arabia, sponsored by Sens. Bernie Sanders, Ron Wyden, Rand Paul, and Mike Lee.

The House will consider a slate of uncontroversial bills under expedited rules on a variety of subjects. A full list of the bills that could come to the floor, as well as bill text, is available here. Members will also vote on Democrats’ Protecting Our Democracy Act. That bill would reform many presidential powers, such as explicitly banning self-pardons, heightening Congress’s ability to enforce subpoenas, and requiring congressional approval for declarations of national emergencies.

Key Hearings

The House Oversight and Reform Committee held a hearing this morning on the threats posed by al-Qaeda, ISIS, and other foreign terrorist organizations. Christopher Landberg, acting principal deputy coordinator for counterterrorism at the State Department, testified, along with Milancy Harris, deputy assistant secretary of defense for special operations and combating terrorism at the Defense Department. Information and video here.

The Senate Rules and Administration Committee held an oversight hearing this morning on the U.S. Capitol Police force in the aftermath of the January 6 attack on the Capitol. Michael Bolton, inspector general for the U.S. Capitol Police, appeared. Information and video here.

A Senate Commerce, Science, and Transportation subcommittee was scheduled to hold a hearing on ocean shipping supply chain challenges this morning. Information and video here.

The Senate Judiciary Committee held a hearing this morning on closing the Guantanamo Bay detention camp. Information and video here.

Undersecretary of State for Political Affairs Victoria Nuland will testify before the Senate Foreign Relations Committee at 2:30 p.m. today on U.S.-Russia relations. Information and livestream here.

Administration officials will testify before the foreign relations panel on Wednesday about the future of American policy toward Taiwan. Information and livestream here.

Instagram head Adam Mosseri will testify before the Senate Commerce, Science, and Transportation Committee about protecting kids online Wednesday afternoon. Information and livestream here.