Despite the bad optics of the Republican disagreement, Mr. McConnell’s supporters — and even some of those unhappy with his strategy — said he had made the smart move in finding a way to give Republicans an off-ramp.
Understand the U.S. Debt Ceiling
Card 1 of 6What is the debt ceiling? The debt ceiling, also called the debt limit, is a cap on the total amount of money that the federal government is authorized to borrow via U.S. Treasury bills and savings bonds to fulfill its financial obligations. Because the U.S. runs budget deficits, it must borrow huge sums of money to pay its bills.
When will the debt limit be breached? After Senate leaders agreed to a short-term deal to raise the debt ceiling on Oct. 7, Treasury estimated that the government would become unable to pay its bills soon after Dec. 15, when a $118 billion payment to the Highway Trust Fund is due.
Why does the U.S. limit its borrowing? According to the Constitution, Congress must authorize borrowing. The debt limit was instituted in the early 20th century so the Treasury did not need to ask for permission each time it needed to issue bonds to pay bills.
What would happen if the debt limit was hit? Treasury Secretary Janet Yellen told Congress that inaction on raising the debt limit could lead to a self-inflicted economic recession and a financial crisis. She also said that failing to raise the debt ceiling could affect programs that help millions of Americans, including delays to Social Security payments.
Do other countries do it this way? Denmark also has a debt limit, but it is set so high that raising it is generally not an issue. Most other countries do not. In Poland, public debt cannot exceed 60 percent of gross domestic product.
What are the alternatives to the debt ceiling? The lack of a replacement is one of the main reasons the debt ceiling has persisted. Ms. Yellen said that she would support legislation to abolish the debt limit, which she described as “destructive.” It would take an act of Congress to do away with the debt limit.
“He is looking at the big picture, and he is looking at what is best for the country in terms of how we get past a crisis,” said Senator Mike Rounds, Republican of South Dakota, who opposed the debt limit bill.
The Republican leader’s chief miscalculation, several said, was declaring in October that neither he nor any other Republican would help raise the debt ceiling again after allowing a temporary increase to move forward — a stance from which he was forced to back down.
But allies said he had little choice. Given the current struggles of the Biden administration, Republicans see themselves in a strong position to win back control of Congress next year, and Mr. McConnell and his top lieutenants were reluctant to give Democrats any ammunition to turn the tide.
They saw failure to raise the debt ceiling and the ensuing economic fallout as a potential political liability that Republicans had to avoid, even if they were uncomfortable doing so.
“It makes no sense to change the subject,” said Senator John Cornyn, Republican of Texas and one of those who voted to advance the legislation. “When your adversary is imploding, why interrupt him?”
Republicans also noted that the agreement preserved the Senate filibuster, a chief objective of Mr. McConnell. He feared that continuing the Republican blockade against raising the debt limit would force the hand of the few remaining Democratic holdouts against weakening the filibuster, an outcome he wanted to avoid at all costs. While the legislation created a one-time exception from the requirement to secure 60 votes to overcome a filibuster, it did so only with Republican consent and cooperation.