Democratic congressional leaders announced Monday they will include suspending the debt limit in a short-term government funding bill, as the United States barrels toward a potential government shutdown at the end of the month.The new plan includes funding the government through December as well as suspending the debt limit through December 2022.
By attaching the debt limit suspension to the temporary funding measure, Democrats are gearing up for a battle with Republicans, who have pushed Democrats to go it alone without any support from the GOP caucus.It’s part of a broader push to derail Democrats’ efforts to pass a large $3.5 trillion reconciliation package, including a number of President Biden’s economic agenda priorities ranging from childcare to education and combating climate change.
On Monday, Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer said the legislation to fund the government through the end of the year would avoid a government shutdown.By including the debt limit in the provision, they’re forcing Republicans’ hands to help address the debt limit or vote against the bill and essentially in favor of a government shutdown.
The move comes as the lawmakers are facing mounting pressure from economic officials as well as the business community to address the debt ceiling and not risk the full faith and credit of the U.S.Defaulting on the nation’s debts would mean catastrophic economic consequences, officials say.
Treasury Secretary Janet Yellen has been warning Congress not to let the government default on its debts, saying a move would “precipitate a historic financial crisis.”
The United States has never defaulted on its debt in history.The move would lead to a pause in critical payments to millions of Americans and reverse the economic recovery plunging the U.S.into a recession, Yellen warned.
Determining exactly when the government would run out of funding and hit the so-called X-date was hard to pinpoint, but estimates by the Treasury and others put it sometime next month.
In a statement on Monday, Pelosi and Schumer said the American people expect their Republican colleagues to “live up to their responsibilities and make good on the debts they proudly helped incur in the December 2020 ‘908’ COVID package that helped American families and small businesses reeling from the COVID crisis.”
When asked about the impact a government shutdown would have on the U.S.and its ability to fight COVID-19 on Monday, White House Press Secretary Jen Psaki said the administration’s focus was on preventing a government shutdown.
Democrats have blasted Republicans for opposing raising or suspending the debt limit.
As the clock slowly ticks down toward the government running out of money and the Treasury resorting to so-called “extraordinary measures” to help pay the bills, congressional Democrats and the White House have pointed out that the debt ceiling was addressed three times under President Donald Trump and the debt expanded by more than $7 trillion during his time in office.
“What Republicans are doing is nothing short of a dine-and-dash of historic proportions,” Schumer said on the Senate floor Monday.”They want working class American families to foot the bill for their irresponsibility.And as a consequence of their callous political gains, it will be veterans and Social Security payment recipients who suffer most.”
But Senate Minority Leader Mitch McConnell held strong Monday on his assertion that Republicans will not help Democrats address the debt ceiling, saying Democrats strategy with borrowing, spending and tax increases was “deliberately designed” to include no GOP input or votes.
“Since Democrats decided to go it alone, they will not get Senate Republicans’ help with raising the debt limit,” McConnell said on the Senate floor.He said Democrats have every tool to address the debt limit on their own.
The House Rules Committee is meeting Monday to discuss the continuing resolution to keep the government funded through the end of the year.The temporary measure also includes money to support the relocation of Afghan refugees.It also includes billions to help respond to natural disasters including Hurricane Ida which wreaked havoc across the eastern U.S.from Louisiana all the way to New York earlier less than a month ago.
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