Happy Friday. Congress has a long list of things to accomplish in the days ahead, which means you’re getting a double dose of Uphill this week. Let’s get to the news.
Slouching Toward Default
In mid-October, the federal government will lose the ability to pay its bills, leading to an unprecedented default on all of its loans. Unless, that is, Congress manages to get its act together and raise the debt limit.
A quick recap from our coverage of the debt limit dilemma last month:
As a matter of law, Congress decides how much money comes into and out of the hands of the federal government when it passes tax and spending bills. When tax revenues aren’t large enough to cover the spending Congress has authorized—which, in modern times, is always—the Treasury Department raises the difference by issuing bonds to borrow the rest. But the Treasury can only do this up to the limit prescribed by Congress—the federal debt ceiling. As total borrowing approaches the debt ceiling, Congress faces pressure to raise the limit, since the alternative—for the United States government to default on its bills—would risk financial catastrophe.
The only difference between now and when we wrote that newsletter: The amount of time Congress has left to avoid that potential financial catastrophe has shrunk, and the political pressure to act is growing. While the federal government has so far not promulgated a specific date, an estimate by Wall Street data firm Wrightson ICAP says the debt cliff will arrive October 25 or October 26.
The Treasury Department is currently operating under “extraordinary measures” to pay the federal government’s bills. However, Treasury Secretary Janet Yellen has warned that the government can only make such emergency measures last until October and has urged lawmakers not to wait until the last minute to act.
Democrats still seem to be banking on a number of Republicans to vote with them to avert the crisis. Democrats have argued that because Republicans signed off on the big spending that incurred the debt that they should take part in voting to pay it off. “We’re paying the Trump credit card with what we would do to lift the debt ceiling,” House Speaker Nancy Pelosi said in a press conference Wednesday, “It’s the responsible thing to do.”
Sen. Chris Coons of Delaware brushed off the notion that anything else besides bipartisan action would happen, according to Axios: “Oh come on, they’re not gonna let us default.” He added that senators have been in this position before and Republicans relented: “We came right up against [default] once and the amount of input senior Republicans got from the financial community, I mean, this would be catastrophically foolish.”
But Senate Minority Leader Mitch McConnell remains insistent that raising the debt ceiling is Democrats’ responsibility this time around. “Let me make it perfectly clear,” McConnell told Punchbowl News. “The country must never default. The debt ceiling will need to be raised. But who does that depends on who the American people elect. I have voted a number of times to raise the debt ceiling in divided government. … The only issue is, whose responsibility is it to do it? A Democratic president, a Democratic House, a Democratic Senate.”
Yellen asked McConnell on Thursday to partner with Democrats on the issue, but he doubled down on his decision. “The Leader repeated to Secretary Yellen what he has said publicly since July,” McConnell spokesman Doug Andres told The Dispatch in a statement. “This is a unified Democrat government, engaging in a partisan reckless tax and spending spree. They will have to raise the debt ceiling on their own and they have the tools to do it.”
The road to raising the debt ceiling got even rockier this week after Sen. Ted Cruz of Texas told Politico he would filibuster any attempt by Democrats to pass legislation to avoid a default.
“They have 100 percent control and ability to raise the debt ceiling on reconciliation. And the only reason they wouldn’t do so is to play political games,” he said.
Cruz and McConnell are far from the Republicans to express an unwillingness to work with Democrats on this issue. There have been no reports of any Republicans breaking with McConnell’s position. Even moderate Sen. Susan Collins of Maine waived Republican responsibility: “It’s going to be entirely determined by the Democrats.”
Republicans say Democrats should pivot to a Plan B: they could attach a debt ceiling hike to the Build Back Better Act (as the $3.5 trillion budget reconciliation package is now known), which is likely to be passed by slim Democratic majorities in both chambers of Congress.
For now, however, Democrats seem intent on calling the GOP’s bluff by folding a debt limit increase into the next continuing resolution to keep the government funded, which is considered “must-pass” legislation. This route would require at least some GOP buy-in, as a CR will need 60 votes to pass. Republicans have warned them against that strategy, with 46 GOP lawmakers signing a letter pledging they would not vote in favor of a CR if it is coupled with funding the government.
Can Raising Congress’s Staff Salary Cap Fight Brain Drain?
House Speaker Nancy Pelosi announced in August that she is raising the annual maximum salary for congressional aides in the House of Representatives to $199,300 a year, in a move lawmakers hope will counteract Congress’ shedding of talent.
The House’s latest Compensation and Diversity Study Report found in 2019 that the average staffer has been in their current position for 2.5 years and on the Hill about 4.2 years. And that average might be declining still more: A 2020 report on the congressional “brain drain” found that staff pay is on the decline, that congressional staffers working on policy are largely inexperienced, and that “turnover among congressional staff is exceedingly high.”
“The average tenure for staff on Capitol Hill is 3.1 years,” the report said. “About 65 percent of staffers plan to leave Congress within five years. Even more strikingly, 43 percent plan to depart by the end of the Congress in which they are employed.”
The report also noted that most staffers polled do not see working on the Hill as a long-term career option. Staffers often jump from the Hill to the private sector or the executive branch.
Raising the cap will officially allow aides to make more than their bosses. The base pay for members—though members in leadership positions make slightly more—has been set by law at $174,000 since 2009 and has fallen behind private-sector wages.
For years, good government advocates and some lawmakers have pushed for staff pay to be decoupled from member pay, arguing that low salaries on average contributes to a retention problem on the Hill.
This is a change that the House Select Committee on the Modernization of Congress has pushed for since its creation after the 2018 midterm elections.
“Retaining senior staff is critical to improving institutional capacity and making members more effective lawmakers on behalf of their constituents,” Susan Curran, communications director for the select committee, said in a statement to The Dispatch.
Pelosi’s change, however, does not enlarge the pot of money lawmakers have to distribute to staff. The amount of money each lawmaker gets per year to pay salaries, as well as other office expenses like travel and renting space in their district, is set by law in annual appropriations legislation. The set of 2022 appropriations bills that the House approved in July allotted $774.4 million for office budgets. But the Senate has yet to approve those spending bills.
Making the one change without the other—letting lawmakers pay senior staff more without increasing funding overall—has led some to worry about unintended consequences. One senior congressional staffer told The Dispatch that while raising the salary cap was a reform that needed to happen, doing it before budgets are increased could end up widening the pay gap between senior staff and already underpaid junior staff.
“If you increase the [chief of staff’s] pay by $20,000, that money has to come from somewhere,” the staffer said. “And probably a lot of places, in the absence of a broader staff pay increase, will backfill junior positions at lower salary levels.”
It’s unclear whether raising the pay cap alone will reduce the fast turnover on the Hill. It’s also unclear whether the Senate, which also has a pay cap on congressional compensation, will follow in the lower chamber’s footsteps.
In a piece for the Washington Post last month, University of Utah political science professor Joshua McCain argued that the move may not amount to much.
“For some job titles, staffers can make three to five times more money by leaving Capitol Hill,” McCain wrote. “The potential salary increases on the Hill won’t be enough to outweigh the financial attractiveness of lobbying jobs.”
Kevin Kosar, a senior fellow at the American Enterprise Institute, agreed. “While I think the salary bump was overdue, I think we have to be realists,” he told The Dispatch. “What K Street will pay for a staffer with long Hill experience is going to be double, triple what they can earn on Capitol Hill.”
Still, Kosar added, for staffers who want to stick it out on the Hill, bumps may help ensure “they’re not getting poorer over time,” as the cost of living in D.C. continues to rise. Meanwhile Kosar noted that entry-level Hill pay remains extremely low, with some positions compensated in the upper $20,000 or low $30,000 range.
Another congressional aide agreed that compensation for low- to mid-level staffers will still be a challenge.
“My sense is that for a lot of young staffers in an expensive city like D.C.—they eventually face a decision to stay on the Hill and do work that they love or move off the Hill in order to take care of balancing checkbooks,” he said.
“Congress has done something on the salary ceiling—they should also do something about the salary floor,” Kosar said. “To ask somebody to work a full-time position—which is more like 70 hours a week—but only offer them an upper 20s in salary, low 30s? Come on. Who can afford to do that? Not many people, and not for very long, because D.C. is just such an expensive city.”
Of Note
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