Thread by @ChadPergram

1) The Hitchhiker’s Guide to How A Fight Over the Debt Ceiling Could Ruin Your Summer
Bananarama may have sang about “Cruel Summer” with their 1980s hit. But they may as well have been writing about the avalanche of legislative Rubik's Cubes which away Congress this summer.

2) Police reform. Infrastructure. A host of bills on Democratic priorities ranging from guns to voting rights. These issues are complex enough and far from resolved. In fact, many of the core Democratic initiatives will likely fail in the Senate.

3) And then, there is the debt ceiling.

The debt ceiling resides in an entirely different Kingdom/Phylum/Class/Order/Genus/Species when compared to other legislative tussles.

4) The debt limit is a statutory ceiling, dictating the maximum amount of red ink the government can absorb.

A failure to raise the debt ceiling could make the markets go bonkers and potentially downgrade the credit worthiness of the United States.

5) Hiking the debt ceiling is never easy in Congress. The federal government will likely collide with the debt ceiling on July 31, 2021. Republicans are loathe to vote to jack up the debt ceiling – especially if it makes President Biden and Congressional Democrats squirm.

6) That’s augmented by the fact that Democrats approved a $1.9 trillion coronavirus aid package in March.

Debt ceiling tangles diminished mostly during the Trump Administration.

7) That’s mainly because President Trump enjoyed two years of his term with the GOP controlling both chambers of Congress. Then the pandemic hit. Congress was forced to spend trillions to combat COVID-19. So the debt limit was something of an afterthought.

8) But the debt ceiling is back in force this summer. Consider the epic battle over the debt ceiling which consumed most of the summer of 2011.

9) Congressional Republicans are already beginning to argue that lawmakers should instill a form of mandatory cuts in place to offset a debt ceiling increase. Sen. Rick Scott (R-FL) has been vocal about fiscal responsibility of late.

10) Don’t forget that Scott is also chair of the National Republican Senatorial Committee. He is more than happy to document how Democratic senators facing competitive re-election bids vote on the debt ceiling.

11) Sens. Maggie Hassan (D-NH), Mark Kelly (D-AZ), Raphael Warnock (D-GA) and Catherine Cortez Masto (D-NV) could be likely targets.

Any garden variety bill to hike the debt ceiling is subject to two rounds of 60 yeas to overcome a filibuster. That’s a problem in a 50/50 Senate.

12) But….

Democrats are now signaling they will likely have to craft a special, filibuster-proof budget reconciliation package for infrastructure. It’s possible Democrats could tuck a debt ceiling increase (or suspension) into any reconciliation package which they prep.

13) Frankly, the infrastructure package – far from finished – is one of the only legislative trains leaving the station. So, it’s a natural fit. And, unlike something like voting rights, the debt ceiling is inherently fiscal in nature.

14) Thus, it qualifies for strict, budget reconciliation rules.

Regardless, inclusion of a debt limit provision could complicate any package on infrastructure – especially if Democrats are trying to acquire GOP votes.

15) Historically, debt ceiling clashes have often created actual spending agreements which have harnessed government spending. Such was the case with a short government shutdown in the fall of 1990.

16) The debt ceiling fight in '11 produced “sequestration,” a process which saved hundreds of billions of dollars in discretionary spending. There was even a smaller budget savings pkg negotiated by then Hse Budget Cmte Chair Paul Ryan (R-WI) & Sen Patty Murray (D-WA) in 2013.

17) Sen. Lindsey Graham (R-SC) is already hoping to engineer some proposals to restructure the nation’s debt problem.

The Treasury Department does have one weapon in its pocket to potentially stave off a debt ceiling crisis. This tool is called “extraordinary measures.”

18) This is where Treasury roots through the federal couch cushions, searching for nickels and dimes. This gambit usually enables the federal government to avoid hitting the debt ceiling for a few weeks or even months.

19) But it’s unclear how robust “extraordinary measures” can be in this environment. That’s because the federal government exhausted trillions of dollars for COVID assistance last year.

20) Treasury might not have as much agility to maneuver around the debt ceiling compared to crises past.

So, brace yourself. A major fight looms. And it may hinge on lawmakers first getting an agreement on infrastructure.