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00:56 - Source: CNN Business
CNN  — 

Democratic leaders are actively discussing attaching an increase to the national debt limit onto a must-pass spending bill to keep the government open, setting up an end-of-the-month partisan standoff with Republicans on the eve of a key deadline to keep federal agencies operating.

What’s still unknown: What will happen next if Republicans block that plan. And that’s causing anxiety in the Democratic ranks with the full faith-and-credit of the United States hanging in the balance ahead of a potential debt default next month.

“Yes, very much so,” said Sen. Tammy Duckworth, an Illinois Democrat, when asked Wednesday if she was concerned about the staring contest between the two sides. “I wish that we would just stop playing this game and get on with the work for the American people.”

Democratic leaders say no final decisions have been made about their next steps. But in private discussions this week between senior Democratic aides and among top senators, the prospect of setting up a showdown vote on the eve of the September 30 deadline seems increasingly likely, according to multiple Democratic sources. And there’s little legislative time left on the calendar.

The House and Senate don’t return for votes until Monday evening. Sometime next week, the House is slated to take up the spending package, likely setting up a Senate showdown the week of September 27, just before federal agencies run out of cash.

The choice for Republicans, Democrats say, would amount to this: If they block an increase in the national debt limit, they would also risk shutting down the government on October 1 as well as the billions for disaster aid for communities hit hard by recent natural disasters and cash for the Afghanistan evacuation effort.

The feeling among Democrats is that they need to pressure Republicans into ultimately breaking with GOP Leader Mitch McConnell. But they’d need the support of 10 Republicans to break a filibuster, something that GOP leaders bluntly say won’t happen if the debt ceiling is attached to the bill.

“I know Sen. McConnell is deadly serious. He’s not a big joker,” said Sen. John Cornyn, a Texas Republican and member of the GOP leadership, said Wednesday. “He knows how this place runs. They are just going to have to reconcile themselves and recognize they are going to have to own it.”

Indeed, Republican leaders are adamant that Democrats – who control both chambers of Congress and the White House – must fully own the politically toxic vote of raising the limit for the national debt, which now stands at $28.8 trillion. The argument: Democrats passed a $1.9 trillion Covid relief plan earlier this year and are pushing through trillions in more spending for their domestic agenda.

So Republicans are demanding that Democrats raise the borrowing limit through a party-line budget process known as reconciliation. But doing that would force Senate Democrats to vote in unison and cast the unpopular vote, while also likely consuming two weeks of Senate floor time – if not longer – to go through the laborious voting process on the floor. The borrowing limit is expected to be breached by mid-October.

Moreover, there are procedural questions about how quickly that can be accomplished given that Democrats are already using the reconciliation process to push through their massive $3.5 trillion economic package that is silent on raising the debt ceiling.

Democrats could potentially offer an amendment to the $3.5 trillion bill on the floor to raise the debt ceiling. But that move could run afoul of Senate rules since they initially opted not to include a hike to the debt ceiling in the budget blueprint that set the parameters for the larger bill.

One option: A straight-up-or-down vote to raise the debt ceiling. But that still would require 60 votes – unless Republicans agreed to allow it to pass along straight party lines at the 51-vote threshold. Since any one senator can force a 60-vote threshold, Sen. John Thune of South Dakota, the GOP whip, told CNN this week that Republicans would not agree to allow a simple majority vote on the debt ceiling.

Thune said “they’re doing all the other stuff” like “massive spending and tax, and through reconciliation – that’s the way to cover the debt ceiling.”

Senate Majority Leader Chuck Schumer says Republicans must own the vote too, pointing to $5.5 trillion in debt accumulated under then-President Donald Trump. Schumer told reporters this week there “are a number of different options” in dealing with the debt limit.

“The White House, Speaker Pelosi and myself are discussing those and we believe that we must do this. We will do it because it’s imperative to do it,” the New York Democrat said.

Justin Goodman, a Schumer spokesman, said if there’s a default, “Sen. McConnell will go down as the first person in history to force a default – and every single American will know the Senate Republicans are to blame.”

A McConnell spokesman fired back: “Majority Leader Schumer knows he has all the tools he needs to raise the debt limit through the same partisan process he’s using for his reckless tax and spending spree.”

But rank-and-file Democrats remain in the dark about how Schumer plans to ultimately resolve the issue if there’s a standoff. And while they are angry at the GOP’s position, they are also nervous about whether the showdown could shut the government down and cause lasting economic damage.

“I think it’s unconscionable to take that position,” said Sen Mazie Hirono, a Democrat from Hawaii, referring to the GOP. “One hopes that the Republicans will wake up to their responsibilities.”

Yet Hirono raised concerns about adding the debt measure to the government funding bill if the result might be a damaging government shutdown. Therefore, she said, Democrats may need to find a path to pass it without Republicans.

“If we’re looking at shutting down the government, which is also totally harmful to the American public, I think that we’re going to need to do whatever we have to do to get that ceiling raised,” she said.

Sen. Jon Tester, a Democrat from Montana who worked with the bipartisan group of senators to pass a $1.2 trillion infrastructure spending bill last month, said he did not know how the debt measure would be passed but said he thinks it will be attached to the stopgap spending bill, known as a continuing resolution, to keep the government funded past September 30.

“I think it’s going to be attached to the CR, but I don’t know,” Tester said.

Tester acknowledged that Democrats would be taking a risk if the government funding bill didn’t pick up Republican votes to pass because the debt provision was attached.

“This isn’t about the debt anyway,” Tester said. “It’s more about putting on a show to certain parts of their base. Doesn’t make sense to me, man. We weren’t elected here to help sink this country. You wonder why China is looking at us, saying we can be in their position. Exactly this kind of crap.”

Jessica Dean and Morgan Rimmer contributed to this report.