A Closer Look at a Trump-Schumer Deal to Eliminate the Debt Ceiling

By Rob Oldham

President Trump made waves in Washington when he agreed to a deal with congressional Democrats that provides relief from the damage caused by Hurricane Harvey, raises the debt ceiling, and funds the government for another three months. In the grand scheme of congressional deals, a three-month funding package and non-controversial disaster relief is not that significant—unless, of course, it is the start of an unlikely Trump pivot toward being an independent rather than a Republican president. However, Trump posited another deal that really would be a game-changer: eliminating the debt ceiling altogether. The president called the debt ceiling unnecessary and said he was talking with Senate Minority Leader Chuck Schumer about doing away with it.

There are quite a few questions about a potential Trump-Schumer deal to nix the debt ceiling. Here are three of them.

(1) What mechanism would lawmakers use to raise the level of debt? Vice President Mike Pence suggested that the House bring back the Gephardt Rule, a procedure that allowed members to increase the debt indirectly through the budget process. Rep. Dick Gephardt (D-MO) devised the procedure and had it codified as House Rule XXVIII in September 1979. Starting in 1980, House Rule XXVIII instructed the House Clerk to engross a joint resolution raising the debt limit whenever the House passed a budget resolution. The new debt level was to be set according to the spending levels in the budget resolution.

Another option would be the Schumer-Obama plan. In 2013, Schumer introduced legislation which would have let the president raise the debt limit unilaterally, while allowing Congress to pursue a resolution of disapproval to stop him. The resolution could be vetoed by the president, meaning opponents would effectively need two-thirds support to pass the resolution and then override the veto. The idea originally came from then-Minority Leader Mitch McConnell. He used the mechanism during the 2011 debt ceiling crisis to allow conservative Republicans to vote against the hike while allowing Obama to avoid the governing perils associated with the debt ceiling debate. However, by 2013 McConnell had soured on the plan and said he opposed it.

(2) Would eliminating the debt ceiling would have any chance of enactment? The short answer is no. Speaker Paul Ryan came out in opposition almost immediately after hearing that Schumer and Trump were considering it. Ryan’s official reason for opposition was the constitutional spending prerogative given to Congress. It also is likely that his caucus would be torn apart in a fight over eliminating the debt ceiling. There is good reason for conservatives to want to keep the ceiling. Their biggest policy win since taking control of the House in 2010 was probably the domestic and military spending caps put in place as a result of the 2011 debt ceiling crisis. And it’s not just conservatives who would oppose it.  Moderates from both parties would be bludgeoned in their next campaign if they voted to eliminate the debt limit altogether. Although the polling can differ depending on whether a debt limit crisis is occurring, 57 percent of the public is opposed to just raising the limit. Regardless of whether an elimination vote would really endanger incumbents, many would see it as a career-ender.

(3) Finally, there is a question of why Democrats would want to eliminate the debt limit. Should they not be able to leverage their votes on the debt ceiling to force Republican leaders to accept some of their policy riders? Some Democrats certainly think so. Rep. Luis Gutierrez (D-IL) has suggested that Democrats use the debt ceiling fight to pass the DREAM Act. Would it really be this simple?

No. It’s complicated, not least because the partisan politics of the debt ceiling debate is in uncharted territory. For the first time since the Tea Party came to town in 2011, there is a unified Republican government. But the GOP, due to internal dissonance, does not have nearly enough yes votes to raise the limit, which gives the Democrats leverage. And doing so creates positioning issues for many Republican lawmakers.

A historical perspective on how the debt ceiling has been increased is useful here. The matter has been contentious since 1953, when President Dwight D. Eisenhower asked for an increase to help pay for the Korean War and the Cold War buildup. He had a unified Republican government, and although the House passed the increase, the Senate did not follow suit due to opposition from fiscal conservatives. Democrats took control of Congress in 1954 and were more open to increases. Once they were in power, most House Democrats voted to raise the ceiling every time the president asked. Many House Republicans went along too, but the number of defectors increased throughout the Eisenhower presidency.

Because Democrats did not give up control of the House for several decades after 1954, they almost always supplied the majority of votes to increase the debt ceiling. Republicans would usually only lend significant support when they controlled the presidency and even that support diminished over time. Over the years, the debt ceiling fight became more complex, especially as the increases began attracting riders related to Social Security benefits, campaign finance, and the Vietnam War. Still, the pattern remained, with consistent support from House Democrats and conditional support from House Republicans. Depending on who was in the White House, Senate Republicans sometimes voted in favor of increases.

It was not until 2003 that the debt ceiling increase finally faced down a unified Republican government, with George W. Bush as president and the GOP having majorities in both chambers. For the first time since 1953, Democrats had no responsibility for increasing the debt limit. And the increase votes came at a time when Republicans were pushing major budgetary policies–such as income tax cuts and spending on foreign wars–that required an increase in the debt. In the debt ceiling hikes of 2003, 2004, and 2006, almost all votes came from Republicans. Even Senator Barack Obama gave a speech in opposition to raising the debt ceiling to pay for the spending priorities of the Bush administration.

Even if they had wanted to do so, Democrats did not have much time to score political points by opposing the debt ceiling. They regained unified control of the presidency and Congress from 2009 to 2010, before seeing the House slip back to Republican hands.

This was a turning point for the politics of the debt limit. The conservatives elected in the 2010 Republican wave did not support increases in debt despite controlling one of the levers of power. In 2011, 2013, and 2015, they forced a coalition of moderate Republicans and all Democrats to supply the votes for the debt ceiling increases. This caused headaches for President Obama, but, as president, he bore the responsibility (in the public eye at least) for keeping the government operating.

With Republicans in control of Congress and the White House after 2016, the responsibility for raising the debt ceiling fell completely on the GOP for the first time since 2006. But this is a much different party compared to the George W. Bush years. In the vote on the Trump-Schumer deal, they supplied just 133 of the 316 yes votes. This is where Democrats theoretically might have leverage. For the first time in decades, Republicans have unified control of government but are unable to advance must-pass legislation without Democratic help. If the GOP cannot do much better than 133 votes for a debt ceiling hike then just half of the Democratic caucus could hold the House hostage to its demands. So why would Schumer want to eliminate his party’s bargaining chip?

There are a couple of explanations. One is that the minority leader is playing the long game. He knows that the cyclical nature of American politics will eventually put his party back in the White House, maybe as soon as 2020. If Republicans maintain a House majority (somewhat likely in the long-term given the natural advantage of their rural and suburban voter distribution), the Democrats might very well face another divided government scenario like 2011, where conservatives held the debt ceiling hostage until they were able to force Obama into a deal that cut discretionary spending. If the debt ceiling is eliminated now, Schumer will not have to worry about it the next time a Democrat is president.

Another explanation is that the Democrats’ bargaining advantage is not quite what it seems. In his blog Honest Graft, political scientist David Hopkins argues that neither party has been very successful in winning concessions through debt ceiling negotiations. With the notable exception of 2011, he is correct that most negotiations end in bipartisan agreements that preserve the status quo, not deals like immigration reform. Simply put, Democrats are not in a position to gain much from a fight over the debt ceiling and their political fortunes would be better served by eliminating the ceiling now before it ensnares a future president like it did Obama.

Regardless of whether Schumer is playing smart politics, this deal does not seem likely to happen. Republicans see it as another threat to their already divided caucus. They most likely recognize that Democrats could benefit from ending the limit in the short-term by using it to campaign against moderates and would certainly do so in the long-term by taking away a major Republican bargaining chip when control of the White House changes. Trump and Pence might be able to garner support for a modest procedural change like the Gephardt Rule. However, as was seen in 2011, rules can easily be repealed once members see them as obstacles to leverage in legislative bargaining. In any case, House conservatives are likely to block any move that Ryan may be pressured into, so expect the debt ceiling to stick around until at least after the 2018 midterms.

Rob Oldham is a political writer interested in legislative politics at the state and national levels.