President-elect Trump and Congressional Republicans are planning how to deal with the national debt ceiling this year.
The debt ceiling, which limits the amount the Treasury can take on to pay the nation's bills, was reset earlier this month after being suspended for the past year and a half. The national debt currently exceeds $36 trillion.
President Trump called on Congress to act quickly to raise or suspend the debt ceiling. But domestic and partisan rifts over spending could complicate the path forward.
Here are some possible scenarios for Trump and the Republican Party.
Trump's “Big, Beautiful Bill”
House Speaker Mike Johnson (R-Louisiana) said this month that Republicans are considering tackling the debt ceiling as part of a major reconciliation bill that includes a big part of President Trump's agenda.
The maneuver would allow the party to bypass Democratic opposition and pass the bill in the Senate with a simple majority, stripping Democrats of leverage to extract concessions in exchange for votes to avoid a default.
“The aim is to address the debt ceiling in a settlement in the process, so that the Republicans, the party in charge of both houses, can decide on the details,” Johnson told reporters last week. .
“If it is carried out on its own or as part of a budget, through normal orders and normal processes, for example, both sides need to negotiate and we think it is better than doing it ourselves. “I feel it,” he said too.
But Republicans already hope to use that complex maneuver to advance key parts of President Trump's agenda as part of their major policies, tackling an ever-growing wish list in areas such as taxes, borders and energy. .
But incorporating a debt ceiling bill into the ever-growing list of wishes Republicans have included in the reconciliation bill could create further headaches for House Republican leaders as they try to lock down support.
Prime Minister Boris Johnson and the House of Commons leadership are navigating close margins in the conference, and it could be difficult to get hardline conservatives on board with raising the debt ceiling.
President Trump and House Republicans discussed using other legislative tools to raise the debt ceiling over the weekend, four sources told The Hill. They said President Trump did not reveal his preferred strategy.
March funding showdown
Congress already faces a mid-March deadline to pass legislation to keep the government funded, with some lawmakers already pushing for a debt ceiling as part of a broader deal to avoid a government shutdown. He shows a positive attitude towards the idea of working on it.
Lawmakers expect Congress to pass 12 annual government funding bills for fiscal year 2025 by a deadline of March 14, but top spending officials say a final deal remains uncertain. They say that the lack of benefits is hindering progress.
The deadline comes about five months after Congress passed its original deadline to pass a fiscal year 2025 funding bill in October, when fiscal year 2025 actually began.
Asked about the possibility of a debt ceiling bill being attached to an expected spending deal to avert a government shutdown in the spring, House Appropriations Chairman Tom Cole (R-Okla.) dismissed the idea last week. I didn't.
“If it helps the leaders of our country, it doesn't matter to me,” he told reporters. “So you're more likely to get bipartisan votes in those situations.”
california fire disaster relief
As California's deadly wildfires garnered national attention, Prime Minister Johnson on Monday floated the idea of tying a debt ceiling increase to the state's disaster aid.
Asked by reporters about the debt limit bill being aligned with a potential disaster relief package, Johnson told reporters: “There's a discussion about that, but we'll see how it goes.”
As part of a stopgap passed last month, Congress passed more than $100 billion in disaster aid to support response efforts after Hurricane Milton Helen and other extreme weather events.
The Federal Emergency Management Agency (FEMA) said it has sufficient resources to meet California's needs in the aftermath of the fires. But some early estimates put losses from the fires at more than $50 billion, and Congress will likely have to act this year to help the state recover.
Is there no ceiling anymore?
playing cards called beforeMany Republicans have long opposed lifting the debt ceiling, but some Democrats have expressed openness to the idea.
“Democrats say they want to get rid of it. If they want to get rid of it, I'll lead the charge,” President Trump said in an interview with NBC News. last monthwho also called the idea “the smartest thing” Congress could do.
“I fully support it,” he also said.
Congressman James Clyburn (D.C.) said this about the idea earlier this month: “That might be the only area where I really agree with Donald Trump.”
But other Democrats are cautious.
When asked about the pitch, Sen. Ruben Gallego (D-Ariz.) said, “I think we need to listen to the details and be open to negotiation and see what we can get in return.” “I don't think they're going to surrender the power of their wallets to President Trump that easily.”
default
President Trump has expressed concern that Democrats are using the threat of national debt default as a way to extract concessions from Republicans this year.
Democrats, who lose power this year, could demand significant concessions in exchange for agreeing to raise the debt ceiling. Republicans used this strategy successfully in the last Congress, striking a deal with President Biden that suspended the debt ceiling until the end of 2024, along with some federal spending limits.
President Trump's eleventh-hour effort last month to get Congress to pass a debt ceiling failed as part of a funding effort to prevent the threat of another government shutdown before the holidays.
“I was very much in favor of giving President Trump the two-year suspension he asked for. Obviously, not everyone at our conference was on that side,” Cole said. “Normally Democrats wouldn't have a problem with that. They like it. But now they think they have a chance to use the debt ceiling to score political points on the reconciliation debate. There is.”
Experts have warned that a national debt default – an outcome considered the least likely scenario – could have a devastating impact on the national economy. But that doesn't mean the country hasn't had its excellent credit rating downgraded by top agencies in the past as a result of bitter partisan tensions over the debt ceiling.
