After the recent debacle over a government funding bill that split the Senate Democratic Caucus, the minority party in the upper chamber of Congress is aiming to solidify their opposition ahead of a summer deadline — and they may end up putting Republicans on the defensive.
Semafor reported Tuesday that Democrats are now putting pressure on party leadership in Congress to be willing to take a firm stance as the U.S. government approaches its debt limit. According to the Bipartisan Policy Center, the debt ceiling will need to be raised sometime between July and October if the U.S. hopes to avoid defaulting on its debt. Now, Republicans are debating whether to put a debt ceiling increase in their massive $4.6 trillion tax cut bill (which is President Donald Trump's preferred approach) or to attempt bipartisan negotiations with Democrats.
It remains an open question of whether Democrats are willing to put the debt ceiling on the line during upcoming negotiations. Sen. John Fetterman (D-Pa.) — who was one of the few Senate Democrats who voted with Senate Minority Leader Chuck Schumer (D-N.Y.) to pass the House Republican government funding bill — told Semafor that when it comes to the debt ceiling, he "refuse[s] to take a hostage like that."
READ MORE: 'Chaos': Social Security agency 'engulfed in crisis' as Musk cuts leave retirees in 'turmoil'
But others are more willing to take that risk. Sen. Richard Blumenthal (D-Conn.) insisted that Democrats "will need a strategy, and we will need to be unified," adding: "We have leverage. And we should use it." Sen. Elizabeth Warren (D-Mass.) was skeptical that Democrats should entertain extending Trump's tax cuts (that primarily benefit the wealthiest Americans) just to raise the debt ceiling.
“Why should we do that?” Warren told Semafor. “I want to know what the Republicans are offering. They seem to think they can run this government with no help from the Democrats. Let’s watch them do it.”
Because the United States is a currency-issuing country, it's impossible for the government to ever run out of money. However, raising the debt ceiling is important for institutional investors and international governments that park their money in the form of U.S. Treasury securities, which are guaranteed by the full faith and credit of the U.S. government (and constitute the vast bulk of the $36 trillion national debt). If Congress failed to raise the debt ceiling and defaulted on its debt, it would mean that the tens of trillions of dollars in Treasury securities are no longer guaranteed, which could destabilize the global economy. Elizabeth Pancotti, who is a former advisor to Sen. Bernie Sanders (I-Vt.), suggested that the debt ceiling negotiations could end up being a powerful arrow in Democrats' quiver.
"[Democrats] seem to get more p---ed every day,” Pancotti said. “Obviously, default is bad; avoiding default is good — but there does come a breaking point.”
READ MORE: 'I would lead the charge': Trump says he agrees with Democrats on this major policy issue
Click here to read Semafor's report in full.