Republicans have threatened to blackmail the Democrats next year by refusing to raise the debt limit unless the Democrats agree to basically repeal most of what they accomplished this year. If the debt limit isn't raised, the U.S. will default on its debt, which will probably cause a worldwide depression. Democrats don't like playing chicken with the world economy and don't want to give in to the Republicans' blackmail.
But the Democrats do have a way out: raise the debt limit before Jan. 3, using the budget reconciliation process, while they still have majorities in both chambers of Congress. Yesterday both Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) said that is precisely what they intend to do. Treasury Secretary Janet Yellen has been urging them to do this for some time now.
Having the debt limit at all is an attempt to repeal mathematics. Congress determines how much the government will spend using appropriation bills. It also determines how much money the government will take in through taxes. The amount by which spending exceeds revenue is the shortfall and that must be met by issuing debt like treasury bills, notes, and bonds. This year's debt is added to the cumulative debt from previous years and determines the total debt. But if that amount exceeds the debt limit, which is set by a different law, there is no way out unless Congress raises the debt limit. If Congress doesn't want to increase the debt it should either cut spending or raise taxes, but it is incapable of doing either. Instead we have periodic debt-limit crises. But if the Democrats can raise the limit in the lame-duck session, the crisis will be averted. (V)