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Senate still not a savior in debt crisis

The Senate still isn’t ready to save the day on the debt ceiling.

As the House GOP scrambles to pass its ultimately doomed bid to raise the nation’s borrowing limit, across the Capitol almost no one is working to devise legislation that can overcome a Senate filibuster, win a House majority and get President Joe Biden’s signature. And time is ticking: Financial analysts are increasingly worried that the nation could default on its debt by early June if the limit isn’t raised.

The House bill “is a start, but it’s only a start,” Sen. Thom Tillis (R-N.C.) said in an interview. He added that he hopes negotiations will start soon but acknowledged they might not until “we finally get the x-date” — Treasury’s updated estimate of when the ceiling will be breached. “Then we probably got about six weeks to solve it.”

Tillis and his 48 Senate GOP colleagues are nonetheless praying that Speaker Kevin McCarthy can muscle through his opening pitch to give their party a modicum of leverage over the coming weeks. A McCarthy failure would make it much harder for 10 or more Republican senators to extract any concessions at all from the president as a condition for raising the borrowing limit.

Yet basically every Senate Democrat, save West Virginia centrist Joe Manchin, says there’s no negotiation to be had no matter what transpires in the lower chamber this week. Senate Majority Leader Chuck Schumer declared the House’s proposal the “DOA Act” for its grim prospects of becoming law and reiterated that he would only accept a “clean” debt ceiling hike.

The yawning gap between the parties in the Senate highlights the high degree of uncertainty over just how Congress and the White House are going to get out of this particular jam. It’s undoubtedly the most consequential topic of 2023 and perhaps the entire two-year session, with massive economic and political stakes for both parties heading into a presidential election year.

Sen. Chris Murphy (D-Conn.) pointedly argued that the House’s GOP’s eleventh-hour horse-trading alone invalidates their negotiating position: “This very public display of dysfunction is a clear indication of how disastrous a negotiation would be. I mean, these guys can’t negotiate amongst themselves.”

Murphy advised House Republicans to pick a fiscal austerity fight, if they want one, during talks over funding the government in the fall: “They’ll lose that fight with the American public, but at least it’ll do a lot less damage,” he said. “My sense is a lot of Senate Republicans think the House strategy is super dumb and politically toxic.”

A growing number of House Democrats want Biden and McCarthy to sit down and negotiate, but that will likely depend on what can pass the House this week. On the other side of the aisle, moderate Sen. Lisa Murkowski (R-Alaska) advised Biden to “take a good look at” what the speaker can pass, then start haggling.

Whenever that phase starts — if it does at all — all eyes will be on the Senate and its track record of getting Washington out of jams with bipartisan solutions. Yet right now there’s very little cooking in the chamber’s dealmaking kitchen.

“We should be able to sit down and talk like grown-ups,” said Manchin, who has met with McCarthy and faces a difficult reelection campaign. “Everybody should be involved.”

The current standoff is inextricably linked to the precedent its resolution might set for the next debt limit fight. Republicans think they can’t fold on this debt crisis without inciting a rebellion by their base, while Democrats believe opening the door to negotiation creates an endless loop of face-offs with the GOP.

Senate GOP leaders bent twice in 2021 to avoid a debt limit breach, and Democrats envision that ultimately that will happen once again. But the Republican-controlled House’s actions thus far have made even that result hard to imagine, as McCarthy digs in on a matter that could determine the future of his speakership.

This explains why Senate Republican leaders are continuing to squash any possibility that Minority Leader Mitch McConnell might be ready to step in and cut a deal amid the staring contest between McCarthy and Biden, who have not met on the topic in nearly three months.

Sen. Shelley Moore Capito (R-W.Va.) said her party is “gonna continue to support what the House has done,” adding that Schumer might step in after the House votes “but I think it’s still going to be McCarthy and Biden” agreeing on a debt solution.

While Republicans worry about allowing another clean debt ceiling increase and sparking another internal fight, Democrats fear a damaging redux of 2011 — when the tea party-influenced House GOP played hardball with then-President Barack Obama and Vice President Biden. The two parties eventually cut a deal to extend the debt ceiling which culminated in significant spending caps.

In retrospect, Democrats view that episode as a mistake that cannot be repeated. Rather than entertaining dealmaking with McCarthy, centrist Sen. Jon Tester (D-Mont.) said simply: “The solution is to not default on the debt.” Sen. Ben Cardin (D-Md.) was just as succinct: “I don’t think there’ll be negotiations on a budget.”

“It’s difficult to understand what the House is going to do. They can’t pass a signable bill unless they bring Democrats into the process. So I think on our side, we’ll try to work with Republicans to see what we can do,” Cardin said, adding that McConnell “understands the seriousness of this.”

McConnell, however, once again aligned with McCarthy this week and suggested Biden join the speaker at “the grown-ups table.” The Senate GOP leader has taken great pains to show little daylight with the California Republican after a number of splits last year raised questions about how the two men would govern their party together.

So despite Democrats’ hopes, there’s little sign McConnell or his lieutenants are ready to lift a finger at this point.

The House bill “forces the administration to come to the table,” Senate Minority Whip John Thune (R-S.D.) said. “The pressure really ought to be on the White House.”

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