Washington is scrambling to stave off an unprecedented debt default as roughly a week stands between the country and a looming deadline.
Treasury Department Secretary Janet Yellen warned earlier this week that the country is still on track to default on its debt as soon as next Thursday if Congress fails to raise or suspend the debt ceiling, which caps much the government can owe.
Leaders on both sides have been adamant they will strike a deal in time to avert a default. But even the broad outlines of one have remained elusive.
Here are four potential escape hatches if leaders don’t come to an agreement before June 1.
Looking to dial up pressure on the other side, Republicans and Democrats alike have shied away from pushing for a short-term hike to the debt limit to buy more time for negotiations.
Speaker Kevin McCarthy (R-Calif.) said Monday, “I don’t think a short-term extension benefits anybody.”
And press secretary Karine Jean-Pierre on Tuesday said, “That is something that both the Speaker and we have said is — the Speaker has been very clear that is not on the table.”
“No, we have to pay our bills,” Rep. Debbie Wasserman Schultz (D-Fla.) told The Hill. “And we have to take care of the needs of the American people, and we have to have responsible Republicans who are willing to step up and do the right thing.”
But with the June 1 “X-date” looming, a short-term extension may be necessary to allow lawmakers and Biden time to strike a deal, write the bill, pass it through both chambers — including giving the House 72 hours to look the measure over — and send it to the president’s desk.
Some Republicans, however, say such a move would likely also require additional negotiations to pass the GOP-led House.
“Depends on what’s attached to it,” Rep. Andy Harris (R-Md.) told The Hill. “I mean, if it rescinds $80 billion in unspent COVID funds that would buy them a little headroom. But a clean extension? Absolutely not.”
Senate Minority Leader Mitch McConnell (R-Ky.) has insisted he’s taking a back seat in debt limit talks, instead letting McCarthy lead negotiations with Democrats.
“Regardless of what may be said about the talks … the president and the Speaker will reach an agreement. It will ultimately pass on a bipartisan vote in both the House and the Senate,” he said this week. “The country will not default.”
However, McConnell could find himself forced to step in and be a key player in negotiations if no deal is in sight and the country is on the brink of default.
McConnell played a central role in Congress’s last major debt limit fight, working with Senate Majority Leader Chuck Schumer (D-N.Y.) on two occasions to raise the debt limit. That includes a short-term extension in October 2021, and then a longer-term increase in December 2021.
Congress raised the debt ceiling at the time to roughly $31.4 trillion, but not without months of drama and clashes over spending.
More Democrats in recent weeks are calling on Biden to invoke the 14th Amendment as a means to address the debt ceiling.
The amendment says the “validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
While Republicans have rejected the idea, liberals have ramped up the push, calling on the party to forgo talks with Republicans and avoid the spending cuts the GOP is insisting on.
Sen. Bernie Sanders (I-Vt.) joined the chorus Wednesday, describing the route as the “only” option at this point, while arguing Biden “has the authority and the responsibility” to do so.
The White House on Tuesday seemed to rule out the possibility; Biden has previously said he’s unsure whether using the amendment would actually prevent a default due to the expected legal battle it would set off.
But he has also said he believes he has the authority to invoke it if needed.
Democrats have been collecting signatures for a measure known as a discharge petition as a part of an effort to force a vote on a clean debt limit hike, despite opposition from McCarthy.
If successful, the measure could allow Democrats to bring a debt limit bill to the floor that has the support of a majority of the House. But Democrats need the support of their entire party, as well as five Republicans, to secure success.
Thus far, every Democrat has signed the petition, but no Republican has come on board.
And the obscure rules governing the discharge petition mean that lawmakers might not be able to put legislation acting on the debt limit on the floor until sometime after June 1, making it a potentially risky gamble for lawmakers.