Republicans are grappling with the possibility they will soon have to work with the Democrats as a deadline to raise the debt ceiling threatens to fray party unity.
Washington has until the late spring or summer to raise the borrowing limit past its $36 trillion cap, setting up a test with economy-reverberating consequences for Republicans. Despite having unified control of Washington, they would have to convince dozens of fiscal hawks to hold their nose and vote “yes” to go it alone.
Congressional Republicans have managed to defy political odds in the first weeks of President Donald Trump’s second term. On Friday, they forced Democrats to swallow a funding bill they crafted without Democratic input.
The rabble-rousing Freedom Caucus has even warmed to the idea of a debt ceiling hike as part of budget reconciliation, so long as it’s accompanied by trillions in spending offsets.
Yet there is a widespread acknowledgment that Republicans’ party-line approach may be coming to an end. Negotiations over reconciliation, a budget process Congress is using to pass Trump’s agenda, are already delicate without the addition of the debt ceiling as lawmakers attempt to extend his 2017 tax cuts permanently.
That could mean Republicans turning to the Democrats for a grand bargain that, among other things, includes disaster relief for California or more defense funding.
“There are only two options,” said Sen. John Kennedy (R-LA), a member of the Senate Budget Committee. “Door No. 1 is to do it in reconciliation, and door No. 2 is do it outside of reconciliation.”
“If we do it outside of reconciliation, we’ll have to bribe the Democrats by giving them more money to get anything passed,” he added. “That’s just the reality.”
Republicans are not inclined to partner with the Democrats as partisan rancor reaches new heights under Trump. Democrats still want guardrails on his sweeping rollback of the federal government and could use the debt ceiling as leverage.
But the competing imperative of passing Trump’s agenda makes that decision more difficult for the GOP. Sen. Rand Paul (R-KY) told the Washington Examiner he will not vote for any reconciliation bill that includes a debt ceiling hike, leaving Republicans room for just two more defections in a chamber they control 53-47.
“I do want to make the tax cuts permanent, and I told them I’ll vote for that if that’s the primary focus of it — with no debt ceiling,” said Paul.
In the House, Republicans adopted a budget framework that raises the debt ceiling by $4 trillion, but the Senate is unlikely to accept the roughly $2 trillion in cuts that were necessary to win over the Freedom Caucus.
The band of fiscal conservatives have what is, in effect, a veto over the legislation due to Speaker Mike Johnson’s (R-LA) two-seat majority.
“I’ve said, of all the issues we’ve got to deal with here in the next six months or so, it’s the gnarliest by far,” Kennedy said of the debt ceiling.
He is among the Republicans that Senate leadership has tasked with engaging the White House on the matter. Kennedy said he’s spoken with Trump, Vice President JD Vance, and chief of staff Susie Wiles about the borrowing limit.
“They’ve made it clear that they admire the problem, that they’re not yet ready to talk about a solution, and I understand that — they have a lot on their plate,” he said.
Trump lobbied Congress to raise the debt limit in December, weeks before he returned to the White House, seeing it as a political football that could blemish his second term. The United States experienced its first-ever credit downgrade over congressional brinkmanship in 2011, with another downgrade in 2023.
But hard-liners rejected the demand en masse as 38 House Republicans voted against a Trump-backed bill that would have suspended the ceiling for two years.
Those lawmakers have warmed to Trump now that he’s back in office, in part because he is dangling unilateral action to slash spending using a process called impoundment. Ahead of a Tuesday vote to fund the government, Trump personally called Republican holdouts in the House, winning over all but one.
The question becomes whether that new peace can last once the Senate enters into the negotiations. The prospect of cutting Medicaid, in particular, has generated heartburn among Senate Republicans.
“You’re gonna have to raise a debt limit. We don’t have a choice,” said Sen. Markwayne Mullin (R-OK), the House liaison for Senate GOP leadership. “We’ll get as many cuts as we can possibly cut without cutting our nose off to spite our face.”
Complicating matters is uncertainty over when exactly the Treasury Department will run out of “extraordinary measures” to stave off default, known as the “X date.” Senate Republicans have signaled it could take until August or later to complete reconciliation, whereas the debt limit could be breached as soon as June depending on factors including this year’s tax receipts.
The perceived foot-dragging has angered House Republicans, who want to get the bill done by Memorial Day. If the timing does not overlap, Republicans could be forced to cut a bipartisan deal on the debt ceiling regardless of their preference.
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The Congressional Budget Office will release a new X date later this month.
“We can do it through reconciliation,” Mullin said. “But if we can’t, there’s other paths to get it through.”