(Bloomberg) — House Speaker Nancy Pelosi signaled that Democrats will seek to extend the federal debt ceiling during the lame-duck session of Congress, avoiding a potential fight with Republicans that she said could threaten the US’s credit rating.
Even with party control of the House undecided on Sunday after the Nov. 8 midterm elections, Pelosi cited Republican threats to use the debt-limit extension “to cut” Medicare and Social Security.
“We’ll see what they contend that they want to do,” Pelosi said on ABC’s “This Week.” “But our best shot, I think, is to do it now.”
A debt-limit standoff in Congress would carry echoes of the 2011 crisis, when the US came within two days of defaulting on its debt, global markets slumped and Standard & Poor’s downgraded the US’s sovereign rating.
Anita Dunn, a senior adviser to President Joe Biden, said “obviously we would think that was a good idea” if Congress lifted the debt limit during the lame-duck period. “It should be bipartisan,” she said on CBS’s “Face the Nation.”
“It is about not just the country but the world’s fiscal stability, economic stability,” she said. “So we would expect that Congress would do the right thing and lift the debt limit either now or early next year.”
The debt ceiling is “something that we will look at over the next few weeks,” Senate Majority Leader Chuck Schumer told reporters in New York. Asked about Pelosi’s comments, he added, “I’m going to sit down and talk to my caucus about broadening the agenda for the lame-duck session.“
Key House Republicans have said this year that they will seek Social Security and Medicare eligibility changes, spending caps, and safety-net work requirements when they sit down to negotiate the debt-limit increase in 2023.
Republicans on Sunday held a 211-204 advantage in projected House seats, where 218 seats are needed for a majority. While Pelosi said Democrats have “a lot of leverage” after keeping control of the Senate, “my hope would be that we could get it done in the lame duck” before the new Congress is seated in January.
Bloomberg Intelligence estimates the current debt cap of about $31.4 trillion is likely to be reached in September or October of 2023.
In 2011, a Republican Congress agreed to raise the debt ceiling only after a President Barack Obama, a Democrat, agreed to future spending cuts.
“There’s great risk to even discussing not doing it,” Pelosi said Sunday, noting the previous debt-ceiling standoff with the Republicans led to the lowering of the US credit rating.
“So this is dealing with fire when we’re talking about the stability of our credit rating,” she said.
–With assistance from Emma Court.
(Updates with Biden adviser’s comments in fifth paragraph, Schumer comments in seventh.)