Democrats are grappling with how to set a new limit for US debt later this year over Republican resistance
The bill would raise the debt limit to $480 billion, which the Treasury Department has said will allow the US to pay its bills by December 3, assuming it has exhausted all of its cash-conservation strategies. Have given. Goldman Sachs predicts that the money will last somewhat longer, though not before the end of the year, suggesting the US will have to address the debt limit again about two months before Congress.
On Tuesday, Mrs Pelosi presented the idea of giving the Treasury secretary the power to raise the borrowing limit, an idea pushed by some House Democrats but giving Congress the power to reject the increase. This is similar to the approach devised by Senate Minority Leader Mitch McConnell (R., Ky.) during the 2011 financial crisis, which culminated with the Budget Control Act of 2011, a law that raised debt limits in three phases, With the latter two growing subject to the disapproval of Congress.
“There seems to be some appeal to both sides of the aisle,” said Mrs Pelosi.
A Senate Republican aide said the Budget Control Act was part of a broader conversation between then-Vice President Biden and Mr McConnell to reduce spending, while Mrs Pelosi is acting in the context of Democrats’ efforts to pass the largest spending bill. Huh. increase in generations.
House Majority Leader Steny Hoyer (D., MD) said on the floor of the House, “We should think about eliminating this debt limit because it all threatens global instability.”
House Democrats, Unified Around raising the borrowing limitIn law, the measure is assured to be enforced as the House needs only a simple majority to pass the law.
Still, Democrats opted to raise the borrowing limit through a complicated process after the House passed the measure to approve rules governing the conditions for debating some other bills. The law goes ahead for his signature on Mr Biden’s desk. Rule 219-206 was ratified.
In the Senate, Democrats and Republicans have battled for months over the terms under which Congress will raise the debt limit, a spurt in a fight over Democrats’ plans for a multitrillion-dollar health, education and climate-change bill. Proxy created.
Debt-limit increases do not authorize new spending, but allow the government to meet existing obligations, including interest on loans and payments to Social Security, Medicare and Medicaid.
Republicans tried to force Democrats to use a complicated process called budget reconciliation to pass the increase without the help of the GOP. The conciliation process allows the Senate to pass laws related to spending, taxes or debt limits with a simple majority, bypassing the 60-vote limit for most laws. But it could also give Republicans some strategic advantage.
The reconciliation process is more time-consuming than passing normal bills—the marathon amendment—requiring two separate sets of vote sessions known as “vote-a-rams.” It would waste time Democrats would love to spend on Mr Biden’s climate and social-welfare agenda. Republicans also hoped that by forcing debt-limit increases through reconciliation processes, the legislative maneuver would force Democrats to increase debt rather than suspend debt limits until December 2022.
Republicans and Democrats in the Senate are set to return to the same debate when they return next week. Last week’s bitter fight got worse when Senate Majority Leader Chuck Schumer (D., NY) criticized Republicans on the Senate floor for the debt-limit crisis, comments that angered Republican leaders, who had quelled rebellion within their own ranks to increase borrowing limits
Mr McConnell called on Mr Biden on Friday to privately discuss his criticism of Schumer, according to a Senate aide, and publicized his position in a separate letter to the president. “In light of Senator Schumer’s frenzy and my serious concerns that another huge, reckless, partisan spending bill will harm Americans and help China, I do not favor any future effort to minimize the consequences of Democratic mismanagement. Will be,” Mr McConnell wrote.
This leaves the question open as to how the Congress will decide the way forward. The December 3 deadline for raising the loan limit coincides with the deadline for passing a law to avoid a partial government shutdown.
Democrats can give in to Republican demands to use the conciliation process to raise the debt limit. A possible opening could come from a Senate lawmaker, who in his final guidance had reserved a decision on the inclusion of debt limits through the current conciliation process explicitly on that subject, according to a person familiar with the matter. This suggests that should Democrats ever formally seek a ruling, they could potentially win support for suspending the debt limit by a particular date and themselves from being linked to an increase in debt by a particular amount. can save.
Democrats may also try again to seek Republican support, even though the Senate’s top Republican said he would not vote again to raise the debt limit through the regular process.
write to Siobhan Hughes at [email protected]