Lawmakers must address debt limit, government spending deadline by December
Congress is gearing up for a busy December, facing spending bills and economic deadlines that could have disastrous consequences if lawmakers miss them.
Lawmakers must address the duel deadline over debt limits and government funding at the top of President Biden’s nearly $4 trillion economic agenda, which Democrats are hoping to pass by the end of the year.
Top Senate Democrats and Republicans announced last week that they had reached an agreement to raise the debt limit before the October 18 deadline and to avert default for the first time – which Treasury Secretary Janet Yellen warned US An unprecedented financial crisis could arise in the
The deal would raise the legal debt cap to $480 billion, which the Treasury Department estimates would be enough to allow the government to continue lending until December 3. current limit is approximately $28.4 trillion and would be allowed to increase to $28.8 trillion. However, the new date coincides with the end of federal government funding on December 3, meaning lawmakers would need to reach a multi-pronged agreement on both issues.
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Here’s a closer look at the chaotic schedule for lawmakers on Capitol Hill:
Lawmakers reached an agreement last week on a short-term debt limit increase, allowing the US government to pay its bills by December 3.
But the agreement did nothing to resolve a widespread standoff between Democrats and Republicans over the debt and possibly set off another showdown for the end of the year.
For months, GOP lawmakers refused to budge from their insistence that Democrats act alone to suspend or raise the debt limit through the budget reconciliation process, allowing them to bypass the 60-vote filibuster in the Senate. Meets. But Democrats were adamant about not going it alone and argued that there was not enough time to use reconciliation, with the US eyeing its first-ever default as of October 18.
Despite last week’s deal, Senate Minority Leader Mitch McConnell hasn’t given up on his demand that Democrats eventually use conciliation to extend the limit beyond December — and warned he won’t help raise the debt limit again. will do.
“I will not favor any future attempt to minimize the consequences of Democratic mismanagement,” McConnell wrote. in a bitter letter addressed to Biden. “Your lieutenants on Capitol Hill now have time to claim they lack to address the debt ceiling.”
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If the US fails to raise or suspend the debt limit, it will eventually have to temporarily default on some of its obligations, which could have serious and negative economic effects. Interest rates are likely to rise, and demand for treasuries will decline; Even the risk of default can lead to an increase in the cost of borrowing.
“America has always paid its bills on time,” Yellen wrote A recent Wall Street Journal op-ed. “But the overwhelming consensus among economists and Treasury officials on both sides is that failing to raise the debt limit will result in widespread economic catastrophe.”
Congress avoided a last-minute government shutdown in late September by passing a short-term spending bill to keep the government funded until December 3. But that means lawmakers have just two months to figure out how to keep the government open first. The stopgap bill expires in early December.
“Fortunately, we have passed a CR until December 3 to keep the government open until we pass the Full Appropriations Bill,” House Speaker Nancy Pelosi said in a letter to Democratic aides.
But the case is still fraught with conflict: Democrats are at odds with Republicans, who want bigger increases for defense and smaller increases for household spending programs.
Biden’s economic agenda
In addition to trying to stop the disastrous fiscal cliff, Democrats also aim to pass Biden’s multi-pronged economic plan: a $1 trillion, bipartisan infrastructure bill and a $3.5 trillion family and climate plan that would dramatically increase funding by the government. Will expand the cherished safety net.
Party infighting, however, is threatening to derail both pieces of marquee legislation: liberal and progressive lawmakers jockeying for control in a narrowly divided Congress, a fight over the size and scope of the big spending bill. are. Centrists are pushing to pass the infrastructure bill first approved by the Senate, while left-wing Democrats insist they will ditch the measure unless the upper house first approves a more detailed spending proposal.
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Moderates have also expressed doubts about another multitrillion-dollar bill – funded by new taxes on wealthy Americans and corporations – as the coronavirus pandemic pushed the US deficit to a record high.
Biden has intervened in a personal effort to end the ongoing intrapartisan war between moderates and progressives and has held several meetings with censors Kirsten Cinemas, D-Ariz., and Joe Manchin, DW.VA. According to Politico, the White House is seriously amusing to make major cuts in the reconciliation bill, with an expected range of about $1.9 trillion to $2.3 trillion.
Democrats have only a few legislative weeks to negotiate and pass a spending bill in both chambers in addition to an infrastructure bill that Biden is critical of his campaign pledges to work across the aisle. But the party will also be grappling with the threat of two imminent crises: a government shutdown and debt default.
“Every day brings us closer to passing both the Build Back Better Act and the bipartisan infrastructure bill, as we work to keep government open and lift debt limits,” Pelosi wrote in her recent letter to Democrats. “