Democrats could drop a provision to raise the debt ceiling from a short term spending bill in order to avoid a government shutdown this week as the party weights its next steps during a crucial time for Joe Biden‘s presidency.
‘It’s among our plans,’ Speaker Nancy Pelosi told reporters in the Capitol on Tuesday morning even as she declined to offer specifics on the next steps. ‘We have a number of things on with the debt ceiling, keep government open.
‘We have to do those imminently,’ she noted.
Democratic leaders are regrouping after Republicans on Monday blocked their short term spending bill because of the language to raise the debt limit. They hoped to knock out government funding and raising the government’s $28.4 trillion borrowing cap – which expires in mid October – in one punch. But now have to come up with a Plan B.
Additionally, Senate Democratic Leader Chuck Schumer and Pelosi are trying to move forward Biden’s economic agenda: his $1.1 trillion infrastructure plan and his $3.5 trillion budget package filled with social programs at the same time.
With the clock ticking down to a government shutdown Friday at midnight, the debt ceiling language may have to go – Republicans said they would vote for a ‘clean’ funding package that didn’t have it.
Adding to the pressure, Democrats Treasury Secretary Janet Yellen wrote to Congressional leaders on Tuesday morning to warn the government would run out of ‘cash and extraordinary measures’ in the next few weeks.
‘We now estimate that Treasury is likely to exhaust its extraordinary measures if Congress has not acted to raise or suspend the debt limit by October 18,’ she wrote.
The debt limit has become a major point of contention between the two parties. Democrats point out it was last raised with the help of Republicans under President Donald Trump and argue most of the debt came from the former president’s tax cuts. Republicans counter that Democrats spent too much government money with their trillion packages containing various COVID relief measures.
The U.S. has never defaulted on its debts in the modern era. Democrats have the votes to pass raising the debt limit on their own but are pressuring Republicans to get on board by attaching the provision to government funding measures.
But Rep. Rosa DeLauro (D-Conn.), head of the House Appropriations Committee, said Monday night that Democrats will have another government spending measure this week without language to raise the debt ceiling, Politico reported.
‘I’m sure there are very, very smart, clever people to figure out how you deal with the debt,’ DeLauro said. ‘Our first order of business is to keep the government open, which we are going to do.’
Such a move would require Democrats to pass a separate measure raising the debt ceiling.
Biden discussed with Schumer and Pelosi of raising it via budget reconciliation in a phone call on Monday night, Politico reported but no final decision has been made.
The GOP presented united front against pairing the two items.
‘The Democrats have known is a nonstarter for more than two months,’ Republican Senate Leader Mitch McConnell said of the debt limit provision shortly before the vote.
He argued instead for a ‘clean CR’ – a continuing resolution to fund the government without raising the debt ceiling.
We ‘have a clean CR that could pass today,’ McConnell noted. ‘It would keep the government open.’
Senators were voting on a procedural motion to advance the short term budget to a final vote. Sixty votes were needed to make that happen. Democrats needed the support of 10 Republicans in the 50-50 Senate.
The vote failed 48 to 50. Senate Majority Leader Chuck Schumer voted ‘no’ as a procedural move so he can change his vote later to bring the legislation back up.
He took to the Senate floor after the vote to slam Republicans for their votes.
‘The Republican Party has now become the party of default, the party that says America doesn’t pay its debts,’ Schumer said.
He said he would bring up the vote again this week but didn’t offer a timeline.
‘Keeping the government open and preventing a default is vital to our country’s future. And we’ll be taking further action to prevent this from happening this week,’ he said.
The House passed the government funding measure last week. It extends government funding through December 3 and suspends the debt limit through December 16, 2022. It also includes $28.6 billion for natural disaster recovery and $6.3 billion for Afghan refugees.
This is just the start of a series of contentious votes on Capitol Hill this week that will encompass Biden’s entire agenda, which faces a derailment due to an internecine battle among Democrats.
Speaker Nancy Pelosi postponed a vote on Biden’s infrastructure package until Thursday as Democrats work to shore up support among moderates for Biden’s $3.5 trillion budget filled with social programs.
Additionally, lawmakers are arguing about raising the debt ceiling, which could find the U.S. government faulting on its debt around mid-October if it’s not raised.
And the clock is ticking on a government shutdown with funding running out on Friday night at midnight.
Biden said on Monday that ‘victory’ is at stake ahead of a tough series of votes this week on Capitol Hill as White House press secretary Jen Psaki warned ‘nothing is guaranteed.’
‘Victory is what’s at stake,’ Biden said.
And the president conceded it may all not be done this week.
‘It may not be by the end of the week. I hope it’s by the end of the week. But as long as we’re still alive,’ he noted, ‘we got three things to do: the debt ceiling, the continuing resolution, and the two pieces of legislation. If we do that, the country is going to be in great shape.’
Democratic leaders also are dealing with drama within their own party.
Moderate Democratic Senators Joe Manchin and Kyrsten Sinema have said they don’t want to vote for the $3.5 trillion budget package- citing its high price tag – but the White House wouldn’t say if they’ve given Biden a number they can support.
Liberals in the House, however, have said they won’t vote for the infrastructure plan until the Senate passes the $3.5 trillion budget.
Originally, scheduled to be voted on Monday, Pelosi announced Sunday night she is pushing the infrastructure vote back to Thursday to give Senate Majority Leader Chuck Schumer more time to negotiate among the party’s warring factions.
In the 50-50 evenly divided Senate, Democrats cannot lose a single vote. And Pelosi only has a four-seat majority in the House.
Pelosi is holding a meeting for House Democrats on Monday night as leaders try to rally their party into a unified front.
The House Budget Committee passed their version of the $3.5 trillion budget package on Saturday. The intention was to prove to progressives that leadership was serious about moving it along with the infrastructure bill to reassure them it won’t be left behind due to moderate demands.
The move didn’t work.
Rep. Pramila Jayapal, the head of the progressive caucus, said they want to see the Senate pass it first – or at least get reassurances from Manchin and Sinema of their support of it.
Biden, meanwhile, has kept an open schedule for the week as Democratic leaders struggle to get a stop-gap budget solution passed by Friday.
‘The president knows that nothing is guaranteed,’ Psaki said at her daily press briefing. ‘He’s going to work this afternoon tonight, tomorrow, to do everything he can to engage with Democrats.’
She acknowledged the disagreements among Democrats even as she expressed optimism the legislation can pass.
‘He’s not naive about how challenging this is he’s been through a few of these rodeos before. And so what we’re focused on right now is working in lockstep with leadership to move the agenda forward and get it over the finish line,’ Psaki said.
She noted Biden is ‘not a wallflower’ and is heavily involved. Biden served in the Senate for over 30 years and prides himself on his relationships with lawmakers.
The president held separate meetings last week with congressional leadership, progressives and moderates. More meetings could be on tap for this week.
‘Things are constantly changing every day and certainly even every hour and we are evaluating. The president has some space in his schedule to make calls, to bring people down here – we’re not that far from the hill – so we will keep you abreast as these details are finalized,’ Psaki said.
‘He is not a wallflower. He is engaging in conversations. He’s having discussions with leaders,’ she said.Internet Explorer Channel Network