The Debt Ceiling Fight: Who’s Lobbying for What?

Update: In the late hours of May 31, 2023, the House of Representatives has passed a bill to increase the debt ceiling through January 2025. The bill now waits for the Senate and President Biden to sign it.

The United States of America now sees a new debt-ceiling crisis every electoral cycle. And yet, few reach the urgency of the ongoing 2023 debacle. With a looming June 1st deadline right around the corner, the country is narrowly looking at its first-ever default.

The crux of the issue is very simple: the Federal Government is close to reaching its debt limit. Once it does, it cannot incur into any more debt without Congress’ express authorization. If it doesn’t get it before June 1st, it won’t have enough money to cover its ongoing expenses -- which would prevent it from paying interest on its existing debt, or the salaries of many Federal employees, among others. But this approval hinges on a careful web of political alliances, which is currently in a stalemate.

The Industries, the Lobbyists, and the Debt Ceiling

Currently, the debt ceiling debate is divided in two distinct camps. On one side, you have the White House and the current administration, supported by most Democrat Senators and House Representatives. They seek a quick resolution with a “no strings attached” debt ceiling raise. This means both Congress and Senate would have to pass a bill that simply raises the debt ceiling, without any additional provision or “off topic” condition.

On the opposite camp lies the Republican Party, and most caucuses and lobby groups that align themselves with the GOP. For them, the Federal Government has shown it cannot handle its own expenses. Any bill extending their credit limit should include extra provisions to curb its spending -- either by downsizing programs, or by steering the government towards the path of fiscal responsibility.

But the debate goes beyond Washington DC. Whatever is included in the bill will likely affect other industries and bodies, and naturally, their respective stakeholders are anxious.

Some Are Just Watching

Currently, top lobbyists from almost every possible industry will admit they are “monitoring” the debt ceiling crisis.

But a few are doing just that, mainly because the interests they represent can pivot one way or the other, depending on what’s decided. This includes many Chambers of Commerce and unions around the country, such as the American Federation of Teachers, the AFL-CIO, the International Association of Machinists and Aerospace Workers, and the National Air Traffic Controllers Association.

In the same “watcher” category, we can include some who do have skin in the game, but are technically tied from direct interference. For example, many local government entities know their future infrastructure projects may be derailed by the debt ceiling bill, but publicly advocating for a “no strings attached” bill would be politically inconvenient. The best example? The Savannah Airport Commission in Georgia.

Others are Getting Involved

Monitoring is one thing -- and actively approaching Senators is a different one. Yet, many lobbyists who recognize the urgency of the situation are actively engaged in the debate. This includes:

On the left

Healthcare and social service organizations are currently among the most active defenders of a “no strings attached” bill. This includes the AARP, the American Hospital Association, and a number of hospital systems who currently receive funds from Medicare or Medicaid.

In addition, many of the more left-leaning unions are also wary of any cuts to their social services, pensions, and benefits. This includes the UAW and the National Treasury Employees Union, whose workers may be furloughed without a quick debt-ceiling agreement

 On the right

On the other hand, many partisan financial institutions and trade groups would prefer to secure a more fiscally-responsible, pro-business future, and they see the current crisis as the perfect time to achieve it. In this category, we can find the Heritage foundation, Freedom Works, and the American Bankers Association, as well as private institutions like Truist or Vanguard.

Meanwhile, many energy companies see this as the perfect opportunity to get rid of some of the newer climate spending laws, and would like to see some restrictions overturned during the negotiations. This sector includes Constellation Energy, Missouri River Energy Service, and American Municipal Power.

Final Thoughts

The repercussions of a possible default will affect local businesses, large corporate entities, and everyday citizens alike Consequently, representatives from all types of organizations are watching the current developments closely. At the same time, the more powerful groups are ready to secure their “ideal” result with any resource at their disposal. Will this be in the best interest of the people? Hopefully, we’ll find out before June 1st.

Grassroots Pulse covers public policy and political issues aimed at engaging highly-active policy makers, donors, and grassroots leaders at the forefront of the political process in America today.

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