For years, Republicans have warned about the government’s reliance on borrowed money to pay its bills. That stance has often led to standoffs over raising the nation’s borrowing cap, with Republicans insisting that any increase in America’s so-called debt limit be paired with spending reductions.
This year, the party of fiscal conservatism is poised to discard that philosophy as Republicans prepare to press ahead with domestic policy legislation that combines nearly $4 trillion in tax cuts with a $5 trillion increase to the debt limit. An increase of that magnitude would be a record and underscore the ideological flexibility that many Republicans are willing to embrace when they are in power.
G.O.P. lawmakers are prepared to push through the debt limit increase with only votes from their party, through a budget process called reconciliation. That is making it harder for Republicans to maintain their fiscal hawk credibility, prompting some resistance from a few lawmakers who have warned that they may not vote for the bill if it includes such a large increase in the borrowing cap.
The national debt is approaching $37 trillion. This week, Senate Republicans unveiled legislation that would raise the debt limit by $5.1 trillion, higher than the $4 trillion increase that House Republicans voted for in their bill last month. Such an increase would likely extend the nation’s ability to borrow into 2028.
Most economists and analysts welcome a reprieve from debt limit brinkmanship that has destabilized the economy in recent years. However, raising the debt limit along with legislation that is projected to add $3 trillion to the national debt over a decade suggests that lawmakers are overlooking the nation’s long-term fiscal problems.
“The most stunning thing is that this massive debt-ceiling increase would be paired with a massive increase in new borrowing, whereas in the past the pressure has been to couple them with debt decreases,” said Maya MacGuineas the president of the bipartisan Committee for a Responsible Federal Budget.
The Treasury Department is currently deploying so-called “extraordinary measures” to allow the federal government to continue paying its bills. The U.S. is expected to run out of cash by the end of the summer, adding to the pressure that lawmakers face to raise or suspend the debt limit. That limit is a cap on the total amount of money that the United States is authorized to borrow to fund the government and meet its financial obligations.
It is not certain that all Republicans in Congress will ultimately go along with increasing the debt limit on their own.
Senator Rand Paul, Republican from Kentucky, said this week that he would vote against the $5 trillion debt increase as part of the One Big Beautiful Bill Act.
“Don’t have the Republicans own this monstrous debt,” Mr. Paul said on the Fox Business Network on Tuesday.
Mr. Paul has called for suspending the debt limit for just three months to keep borrowing in check and said that he wants it to be a stand-alone piece of legislation so that it can get the support of Democrats.
Congress can either raise the debt limit by a specific amount or suspend it for a certain period of time. The suspension from 2019 to 2021 covered $6.4 trillion of spending during the Trump and Biden administrations, with much of that money used for pandemic emergency spending.
In situations where Republicans control Congress, Democrats usually will vote to raise the debt limit if it is a stand-alone measure or as part of a broader agreement that includes some of their policy priorities.
During Mr. Trump’s first term, he struck deals with Democrats in 2017 and 2018 to suspend the debt limit. Before taking office this year, Mr. Trump called for the debt limit to be abolished, a desire that is shared with some Democrats including Senator Elizabeth Warren of Massachusetts.
The president echoed those sentiments on Wednesday when discussing what is at stake if Republicans cannot pass the policy bill.
“The debt ceiling, we have to move the debt,” Mr. Trump said at the White House, adding that if the debt limit is breached, the economy would face a 1929-style crash.
William Hoagland, the former top budget expert for Senate Republicans, said that Republicans are lumping the debt limit into their broader policy bill because they do not want to make policy concessions to Democrats. That decision, he suggested, could mean that the era of bipartisan debt limit increases is over.
“We’re setting the precedent now that it’s always going to be a partisan vote,” said Mr. Hoagland, who is a senior vice president at the Bipartisan Policy Center.
Trump administration officials have downplayed concerns that the legislation will add to the national debt, arguing that faster economic growth, “government efficiency” efforts and revenue from tariffs will make up for any shortfalls.
Economists and analysts have been skeptical that these initiatives will be sufficient, and they remain worried about America’s fiscal trajectory.
The credit rating agency Moody’s downgraded U.S. debt in May to one notch below its highest Triple-A rating because of rising debt levels.
Goldman Sachs warned in a research note this week that inaction on deficits would be costly and noted that “the primary deficit is much larger than usual in a strong economy, the debt-to-GDP ratio is approaching the post-WW2 high.”
Meaningful deficit reduction will be difficult to achieve without making changes to the nation’s social safety net programs. Republicans and Democrats, fearful of political backlash, have been reluctant to pursue policies that would reduce Social Security and Medicare benefits.
Instead, both parties have gravitated toward new spending initiatives or tax cut plans that continue to inflame the national debt. Congressional scorekeepers predicted this month that debt held by the public would total nearly 124 percent of the nation’s gross domestic product by 2034 if the House version of the bill were to become law.
“The House and Senate reconciliation bills may contain some different policy details, but one thing is the same: Both bills would add many trillions to our national debt,” said Michael Peterson, chief executive of the Peter G. Peterson Foundation, which promotes deficit reduction. “With $36 trillion of debt already, we should be focused on slowing the growth of our debt and deficits, and the reconciliation process was originally intended to be used for that.”
Alan Rappeport is an economic policy reporter for The Times, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters.
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