President-elect Trump wants congressional Republicans to figure out a way to avoid a default on the national debt after venting his frustration with the Senate GOP over their failure to raise the debt limit as part of a government-funding package last month.
Trump told Senate Majority Leader John Thune (R-S.D.) at a recent meeting that it’s now up to him to find a way around the debt-limit impasse, according to a Republican source familiar with the conversation.
“The debt limit came up. He’s very unhappy that that’s hanging out there and he made it Thune’s problem. He said, ‘John, I don’t know how you’re going to solve this problem, but you’re going to figure out some way,’” said a GOP senator who attended the meeting.
Republicans say Trump’s unhappy that Congress failed to raise the debt limit before he takes office on Jan. 20 and wants congressional leaders to take care of the looming problem, largely washing his own hands of the matter — at least for now.
“Yes, we have to figure out because we’re in the majority,” Sen. John Cornyn (R-Texas) said of Congress’s inability to take care of the debt limit before Trump’s inauguration.
“He’s not happy, I’m not happy, but that’s where we are,” Cornyn said.
It’s becoming clear that a debt-limit increase won’t be a part of a budget reconciliation package being plotted out to move much of Trump’s legislative agenda.
Trump wants that package to be moved in one bill that would include border and energy provisions and an extension of the 2017 tax cuts he signed into law. Including a debt hike in that bill would be tough since conservatives say hiking the nation’s debt limit must be coupled with up to $2 trillion in spending cuts.
Trump urged House Republicans last month to vote for a stopgap funding measure bundled with disaster relief and economic aid to farms that also included — at his insistence — a proposal to extend the debt limit past the 2026 midterm election.
And he vented his fury when conservatives in both chambers — including Texas Rep. Chip Roy (R) and Kentucky Sen. Rand Paul (R) — balked at voting for any debt-limit legislation that did not include substantial spending cuts to offset the impact on the federal debt.
“Chip Roy is just another ambitious guy, with no talent,” Trump fumed on Truth Social. “I hope some talented challengers are getting ready in the Great State of Texas to go after Chip in the Primary. He won’t have a chance!”
Trump grumbled that “increasing the debt ceiling is not great” and that “we’d rather do it on Biden’s watch.”
This now leaves Thune and Speaker Mike Johnson (R-La.) in the tough position of having to figure out a way to raise the debt limit sometime later this year, when Republicans will be in control of the White House and both chambers of Congress.
GOP senators say Thune and Johnson at this point have two viable options: They can either attempt to negotiate a debt-limit increase with Democrats, which would likely entail agreeing to more spending, or they can simply bring a stand-alone debt-limit increase to the floor — without concessions — and dare Democrats to vote against it.
Senate Democratic Leader Chuck Schumer (N.Y.) got Trump and Republican leaders to agree to two major spending increases in 2018 and 2019 in exchange for Democratic votes on proposals to raise the debt limit.
Trump agreed in February 2018 to raise defense and nondefense spending by $300 billion in exchange for lifting the debt ceiling. Then he agreed to another $320 billion spending increase in July of 2019 to extend the debt limit past the 2020 presidential election.
Senate Republicans say it looks increasingly unlikely that Thune and Johnson will attempt to include debt-limit legislation in any package used to move Trump’s agenda.
That’s because a reconciliation bill, which can pass with a simple majority through the Senate and thereby avoid a Democratic filibuster, isn’t expected to get any Democratic votes in the Senate or House.
But Democratic votes might be needed to move the debt ceiling, since getting nearly the entire House GOP conference to agree on raising the debt limit seems unlikely at this point.
“It’s a really a heavy lift for Johnson,” said former Sen. Judd Gregg (R-N.H.), the former chair of the Senate Budget Committee.
He warned that Democrats would likely demand a “steep” price for voting for any bipartisan debt-limit bill, and that any concessions Johnson and Thune make to get Democratic support would inevitably push more Republicans to vote against it.
“That’s going to lose even more Republicans,” he said. “It’s really a heads-you-lose, tails-you-lose situation. There’s no easy path for getting this done given the numbers.”
Trump and Senate Republicans didn’t talk seriously about including language to raise the debt limit in the budget reconciliation package when they met Wednesday at the Capitol to map out strategy.
GOP senators say there’s little confidence that Johnson would be able to unify enough of his conference to raise the debt limit without Democratic help, given that he can only afford to lose one or two Republican votes because of his extremely narrow majority.
Timing is another problem. Congress will need to raise the debt limit by midsummer, but there’s no guarantee that Republicans will be able to sort out their disagreements on tax policy and spending cuts over the next six months.
Trump has insisted on Republicans passing “one big, beautiful bill” to secure the border, reform oil and gas drilling restrictions, cut taxes and cut spending, instead of breaking up his agenda into two reconciliation packages.
Another major drawback to adding a debt-limit increase to the budget reconciliation package is that doing so would require lawmakers to explicitly state how much they would like to raise the borrowing cap — a number that would be well over $1 trillion — instead of just setting a future date for the expiration of borrowing authority.
Conservatives say they’re willing to raise the debt limit in exchange for up to $2 trillion in mandatory spending cuts or a plan to balance the federal budget in the next few years.
But such drastic cuts in spending — even if they exempt Social Security, Medicare and defense — will have a tough time winning the support of Republican centrists.
Sen. Rick Scott (R-Fla.) has argued to colleagues that the best way to deal with the debt limit is to adopt a plan to balance the budget.
Scott and other conservatives including Sens. Ron Johnson (R-Wis.) and Mike Lee (R-Utah) have reviewed data showing that if Congress can return the federal government’s annual outlays to what they were in 1998 — adjusted for inflation — they would be able to eliminate the deficit, which is projected to reach $1.8 trillion this year.
Total federal spending jumped from $4.5 trillion in 2019 to more than $6 trillion per year in 2020, 2021 and 2022 during the COVID-19 pandemic.
Johnson, the Wisconsin senator, has calculated that cutting total federal spending to $5.48 trillion — still more than what the government spent annually before the pandemic — would allow Congress to balance the budget, according to a packet of charts and spending numbers the Wisconsin senator has shared with colleagues.
