Congress is gearing up for a turbulent December, facing a flurry of spending bills and economic deadlines that could have catastrophic consequences if lawmakers miss them.
Lawmakers must heed the deadlines for the debt ceiling and public funding duel, in addition to President Biden’s nearly $ 4 trillion economic program that Democrats hope to pass by the end of the year .
The main Democrats and Republicans in the Senate announced last week that they had reached an agreement to raise the debt ceiling before the October 18 deadline and avoid a first default – which the secretary said to Treasury Janet Yellen, could trigger an unprecedented financial crisis in the United States.
The deal will raise the legal debt ceiling by $ 480 billion, which the Treasury Department said would be enough to allow the government to continue borrowing until Dec. 3. current limit is approximately $ 28.4 trillion and would be allowed to reach $ 28.8 trillion. The new date, however, coincides with the expiration of federal government funding on Dec. 3, meaning lawmakers will likely have to come to a multi-pronged agreement on both issues.
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Here’s a closer look at the chaotic schedule ahead for lawmakers on Capitol Hill:
Lawmakers struck a deal last week to raise the short-term debt ceiling to allow the U.S. government to pay its bills until Dec. 3.
But the deal did nothing to resolve the wider deadlock between Democrats and Republicans over debt and likely sets up another showdown for the end of the year.
For months, GOP lawmakers refused to budge in their insistence that Democrats act alone to suspend or increase the debt ceiling through the budget reconciliation process, allowing them to bypass a 60-vote obstruction in the Senate. But Democrats were adamant not to go it alone and argued there was not enough time to use reconciliation, with the United States bracing for its very first default as early as October 18.
Despite last week’s deal, Senate Minority Leader Mitch McConnell has not abandoned his demand that Democrats ultimately use reconciliation to raise the cap beyond December – and warned it would not help not to raise the debt limit again.
“I will not participate in any future effort to mitigate the consequences of Democratic mismanagement,” McConnell wrote in a scathing letter to Biden. “Your lieutenants on Capitol Hill now have the time they claimed they lacked to tackle the debt ceiling.”
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If the United States does not raise or suspend the debt limit, it may have to temporarily default on some of its obligations, which could have serious and negative economic implications. Interest rates would likely rise and the demand for treasury bills would fall; even the threat of default can lead to increased borrowing costs.
“The United States has always paid its bills on time,” Yellen wrote a recent editorial in the Wall Street Journal. “But the overwhelming consensus among economists and treasury officials on both sides is that failure to raise the debt ceiling would produce widespread economic catastrophe.”
Congress avoided a last-minute government shutdown at the end of September by passing a short-term spending bill to keep government funded until December 3. But that means lawmakers have roughly two months to figure out how to keep government open before the interim bill expires in early December.
“Fortunately, we have already passed an RC until December 3 to keep government open until we pass the full supply bill,” House Speaker Nancy Pelosi wrote in a letter to his fellow Democrats.
But the issue is still rife with conflict: Democrats are squabbling with Republicans, who want larger increases in defense spending and smaller increases for domestic spending programs.
Biden’s economic agenda
In addition to trying to prevent a devastating fiscal cliff, Democrats are also aiming to pass Biden’s multi-pronged economic plan: a $ 1,000 billion bipartisan infrastructure bill and a 3-part family and climate plan. $ 500 billion that would significantly expand the government funded safety net.
Inter-party infighting, however, threatens to derail the two big-name laws: Moderate and progressive lawmakers fight for control in a tightly divided Congress, vying for the size and scope of the larger spending bill. . Centrists are pushing to pass Senate-approved infrastructure bill first, while Left-wing Democrats insist they will sink the measure unless the upper house approves first a broader spending proposal.
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Moderates have also expressed skepticism about another multibillion-dollar bill – funded by a slew of new taxes on wealthy Americans and businesses – after the coronavirus pandemic pushed the US deficit to an all-time high.
Biden stepped in in a personal attempt to avoid the brewing intra-party war between moderates and progressives and held several meetings with the Senses. Kyrsten Sinema, D-Ariz., And Joe Manchin, DW.Va. According to Politico, the White House is seriously considering slashing the reconciliation bill significantly, with an expected range of around $ 1.9 trillion to $ 2.3 trillion.
Democrats have just a few legislative weeks to negotiate and pass a two-chamber spending bill in addition to the infrastructure bill that Biden sees as critical to his campaign pledge to work across the country. the aisle. But the party will also juggle the threat of two looming crises: a government shutdown and debt default.
“Every day brings us closer to the passage of the Build Back Better Act and the bipartisan infrastructure bill, as we work to keep government open and raise the debt ceiling,” Pelosi wrote in his recent letter to democrats.