Democrats pitch debt-ceiling suspension, warn of alternative
WASHINGTON — Backed by the White House, Democrats in the House and Senate on Monday unveiled a measure that would fund the government through December while staving off a potential default on U.S. debts into next year, setting up a last-minute scramble ahead of fiscal deadlines on Capitol Hill.
The plan could face immediate head winds since Republicans have pledged to vote against an increase in the country’s borrowing limit, even if it is attached to a measure preventing a shutdown — part of a GOP effort to scuttle President Joe Biden’s economic agenda.
As they presented their plan, Democrats once again sounded dire warnings about the consequences of failure, which they said could destabilize global markets, shutter critical federal services during the pandemic and hold back assistance to millions of Americans in the aftermath of storms that battered the Gulf Coast and parts of the Eastern Seaboard. They urged Republicans to join them in adopting the measure, argu
ing that the debt ceiling helps cover spending that’s already occurred.
Should lawmakers fail to approve a suspension of the debt limit, the government could default on its debt for the first time in history. That could trigger a financial crisis, or at least a crisis of confidence in the creditworthiness and governance of the United States.
“Addressing the debt limit is about meeting obligations the government has already made, like the bipartisan emergency COVID relief legislation from December as well as vital payments to Social Security recipients and our veterans,” said House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Charles Schumer, D-N.Y., in a statement Monday. “Furthermore, as the Administration warned last week, a reckless Republican-forced default could plunge the country into a recession.”
“The American people expect our Republican colleagues to live up to their responsibilities and make good on the debts they proudly helped incur,” Pelosi and Schumer said.
The president backed the congressional leaders’ plan. “This is a bipartisan responsibility, just as it was under my predecessor,” Biden said in a tweet. “Blocking it would be inexcusable.”
Yet Senate Minority Leader Mitch McConnell, R-Ky., said he’s not about to help pay off debts when Biden is about to pile on more with a “reckless” tax and spending package.
“Since Democrats decided to go it alone, they will not get Senate Republicans’ help with raising the debt limit. I’ve explained this clearly and consistently for over two months,” McConnell said Monday on the Senate floor, though some GOP senators might have a tough time voting no.
When McConnell was in control of the Senate, he relied on Democratic votes to help raise the debt ceiling, and Democrats said they expect the same from him now.
By withholding votes, Schumer said, “what Republicans are doing is nothing short of a dine-and-dash of historic proportions.”
The Democrats’ move sets up a fierce sprint on Capitol Hill over a deadline-laden next few weeks. Congress must fund the government before Oct. 1 or critical federal services will shut down. And lawmakers must address the debt ceiling before an unspecified time next month, when the U.S. Treasury expects to run out of cash, or risk calamity.
The debates have taken on additional significance at a time when Democrats simultaneously seek to move two major spending packages that fulfill the thrust of Biden’s economic agenda — a roughly $1 trillion plan to improve the nation’s roads, highways, pipes, ports and Internet connections; and an up-to-$3.5 trillion proposal to rethink federal education, immigration, health care and tax laws.
The future of those packages similarly hangs in the balance in the days ahead, as House Democrats gave themselves a loose, end-of-September deadline to adopt that spending despite their growing internal divides.
The larger proposal would also impose tax increases on corporations and wealthy Americans earning beyond $400,000 a year.
MUST DO’S
The weighty issues prompted the chamber’s top budget-maker, Rep. John Yarmuth, D-Ky., to signal on Fox News Sunday that the party’s timeline may “slip past” this month into October.
“What we’re focused on is the fact that these are things that we absolutely have to do as a country,” he said. “These are not frivolous matters.”
The flurry of activity marks one of the most significant tests to date for Democrats’ narrow yet powerful majorities, as well as Biden’s political prowess in keeping his fractious party together.
The most immediate, urgent task concerns government funding: Congress has until the end of September to ratify a new spending agreement or else lawmakers risk a shutdown. Democrats on Monday started the process by which they hope to bring their plan to the House floor this week. The proposal would fund federal operations until December, at which point lawmakers would have to enact another stopgap or pass a series of appropriations bills that fund the government into 2022.
While text was not immediately available for the stopgap spending bill, Democrats said it included new aid to the hurricane-affected East and Gulf coasts as well as new resettlement money for refugees arriving from Afghanistan. White House officials earlier this month requested $14 billion to respond to the disasters and another $6.4 billion for Afghan relocation efforts.
But Sen. Bill Cassidy, R-La., showed little willingness to compromise Sunday, even with the potential promise of resources for his state. Some parts of Louisiana were still without power three weeks after the state was hit by Hurricane Ida.
“If you want to come back and meet where we can actually find common ground, where we can actually address needs as opposed to a Democratic wish list, well then we’ll help,” Cassidy said on NBC’s “Meet the Press.” “But not when you’re just trying to tank the economy by fueling inflation.”
Democrats require Republican votes in the nearly deadlocked Senate. The prospect of a stalemate that shutters key government agencies and programs has grown in recent days as Democrats tacked an additional element onto their continuing resolution — an effort to address the debt ceiling.
ROOTS OF CONTENTION
The ceiling corresponds to the amount the U.S. government can borrow to pay its bills. Democrats and Republicans previously suspended it until the end of July, at which point the Treasury Department has said it probably has until mid-October before it runs out of money and risks default.
But Republicans for months have threatened to withhold their votes on a debt ceiling increase, arguing that Democrats should use other means to address the critical threshold.
The Republicans’ potential blockade has enraged Democrats, who have stressed repeatedly in recent days that the GOP opposition is hypocritical, as the parties banded together to raise the ceiling under President Donald Trump, under whom the country added $7 trillion to the national debt, now at $28.4 trillion. Those debts include stimulus programs enacted on a bipartisan basis last year as well as Trump’s priorities, such as building a wall on the U.S.-Mexican border.
“I would hope that Republican friends will get beyond politics and do what’s necessary to keep this country moving forward” and keep “financial integrity in place,” said Rep. James Clyburn, D-S.C., the House majority whip, in an appearance on CNN’s “State of the Union” on Sunday.
As part of the new proposal, Democrats have chosen to suspend the ceiling until December 2022. The standoff recalls the brinkmanship from roughly a decade ago, when Republicans held firm against raising the debt ceiling in a move that rattled global markets.
“The position that Republicans, primarily my senator, Mitch McConnell, have taken, is totally irresponsible,” Yarmuth said.
Democrats have an additional option; they could choose to address the debt ceiling as part of their $3.5 trillion package. They intend to move that bill through a process known as reconciliation, which allows party lawmakers to sidestep GOP filibuster in the Senate because it does not require 60 votes to pass.
McConnell has called on Democrats to take this route. But some party lawmakers have raised concerns with that idea, fearing it would balloon their bill’s overall price tag at a time when they already are dealing with internal divides over how much to spend in the first place — another set of fights that loom large over the House and Senate as they return to work this week.