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The Republicans’ Debt Ceiling Trap

In exchange for not blowing up the economy, the GOP is asking for expedited pipeline approval, and pretending it will help clean energy as well.

Chip Roy speaks at a lectern with other legislators standing behind him.
Win McNamee/Getty Images
Representative Chip Roy speaks during a press conference outside the U.S. Capitol on May 17.

“They know that if they go down that road with this Fourteenth Amendment argument, we will blow crap up,” Texas Republican Chip Roy said last week, referring to Democrats’ proposal to sidestep debt ceiling negotiations via the Constitution’s provision protecting “the validity of the public debt.” Roy threatened “open warfare” if “these SOBs” take that option. Debt ceiling talks are set to resume Monday with a meeting between President Biden and House Speaker Kevin McCarthy.

Let’s get real: The GOP intends to “blow stuff up” whatever strategy Democrats adopt. The reason this charade is happening at all is because of a 100-year-old provision meant to allow Congress to spend more during crises—originally World War I. Congress has since that time engaged in the bizarre ritual to periodically lift that ceiling. Ordinarily that happens without much fanfare. But on a few occasions Republicans have opted to treat this secular ceremony as a hostage negotiation. That’s what’s happening now, although the White House preferred, until the recent breakdown, to describe it as Democrats and Republicans coming together to hash out “a reasonable bipartisan budget agreement.”

In exchange for not risking a default that could plummet the United States into a recession and send shock waves through the global economy, House Speaker Kevin McCarthy has drafted a ransom list that includes spending limits and work requirements on core social programs. He’s also included a phrase with a remarkable capacity to confuse even well-meaning policymakers: “permitting reform.”

A catchall term that members of both parties have used to describe what’s needed to meet the country’s energy goals, “permitting reform” is in the eye of the beholder. For many Democrats it refers to a collection of changes needed to deploy clean energy quickly enough to reach net-zero by 2050. A key prize in that is making it easier to build transmission lines, many more of which will be needed as things like transportation and home heating and cooling are electrified.

For Republicans and their donors, “permitting reform” means precisely one thing: being able to build as much fossil fuel infrastructure as they please. As part of debt ceiling talks, they’ve proposed a two-step deal. The first step would include changes to the National Environmental Policy Act, potentially including limits on the length of environmental review and curbs on the sorts of legal challenges that can be brought against projects. Then, sometime soon, Republicans pinky-swear to pass something that makes it easier for the federal government to approve interstate transmission lines. In essence, the offer is: Give us what we want now, and we’ll get around to doing that thing you want later—or else.

Over the last several years, there’s been a tense debate among climate advocates about how much poison Democrats will have to swallow to extract policies needed to preserve life on Earth. So let’s consider: Why would a party content to plunge the country into a recession pass a permitting-reform package as part of debt ceiling negotiations that will benefit renewables more than the fossil fuel industry?

The short answer is that they wouldn’t. This two-step proposal is a trap, and a pretty transparent one.

The good news is that lots of Democrats don’t seem to be falling for it. “Let’s be serious,” Senator Brian Shatz said last week. “The idea that we’re going to do your stuff first and my stuff later is just not how politics works.” Even the climate advocates most bullish on permitting reform have said Republicans’ two-step idea is a nonstarter. On Friday, Politico reported that a bipartisan group of senators who’ve been backing more and less fossil fuel–friendly permitting-reform packages—including Joe Manchin, Shelley Moore Capito, Tom Carper, and John Barasso—met to discuss excising such proposals from the debt ceiling talks.

Still, there’s no guarantee that permitting-reform provisions are gone for good in budget talks. The White House, according to top climate adviser John Podesta, was open to the idea as of early last week. It’s been a longtime priority for top Republican negotiator and Louisiana Congressman Garret Graves. While Graves has earned Paul Ryan–style plaudits as a “straight shooter” and “policy wonk,” his most generous campaign donors are in the oil and gas industry. Graves has received $859,295 in campaign contributions from the sector since 2013. Top donors to his most recent reelection campaign include PACs associated with Chevron ($12,500) as well as Occidental Petroleum, ConocoPhillips and ExxonMobil, which all gave him $10,000 each. This session Graves was the lead author of permitting provisions included in H.R. 1, the “Limit, Save Grow Act,” to streamline environmental reviews and limit potential legal challenges to new infrastructure.

Among the two people tapped by the White House to lead negotiations is longtime Biden ally Steve Ricchetti. Until joining Biden’s vice presidential staff in 2012, Ricchetti was the co-partner with his brother, Jeff, at the family lobbying shop that shares their name. Five days before Biden’s inauguration, TC Energy—the company behind the Keystone XL pipeline, formerly known as Transcanada—hired Jeff Ricchetti. Since that time, TC Energy has paid Richetti Inc. $810,000, including $90,000 this year. Jeff Ricchetti continues to be a paid lobbyist for TC Energy, though both he and his brother maintain their work is entirely separate. Steve Ricchetti has caught flack over those ties before, and recused himself from matters involving both TC and the firms’ numerous pharmaceutical clients. No such effort has been made this time around with the debt ceiling negotiations, although Ricchetti is one of three people—alongside Office of Management and Budget Director Shalanda Young and Office of Legislative Affairs Director Louisa Terrell—that the White House has dispatched to determine what makes it into a final agreement, potentially including permitting-reform provisions that could have major upsides for Ricchetti’s brother’s client.

On Friday, Graves griped that negotiations were at an impasse, chiding his opponents over a supposed inability to have “reasonable conversations.” Nothing about these talks is reasonable.

The only reasonable path forward is to obviate the need for this circus entirely. Less than two weeks out from a potential doomsday scenario, several Democratic lawmakers have joined the call to stop the talks and play hardball. As Roy warned, progressives have now said Biden should instead invoke the Fourteenth Amendment, Section 4 of which states that 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 doing so would allow the government to defy statute and continue issuing securities beyond the debt ceiling limit, the perhaps lower-hanging fruit, legally speaking, is for the Treasury Department to order the minting of a platinum $1 trillion coin to be deposited into the Federal Reserve. The Fourteenth Amendment provides the legal backing for such a move, and having the money in the bank could keep the economy going amid the inevitable legal challenges the right would bring.

As of now, though, Democrats are still debating which bomb to blow up—and have been troublingly open to the idea that Republicans’ “permitting reform” proposals could yield major upsides for the climate. They should look to defuse the bomb entirely by ending the talks and minting the coin.