House and Senate Democrats 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 key fiscal deadlines on Capitol Hill.
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The plan immediately faced political headwinds, as Senate Minority Leader Mitch McConnell (R-Ky.) reaffirmed that Republicans would oppose any increase in the country’s borrowing limit, even if it is attached to a measure preventing a shutdown — part of a broader GOP-led effort to scuttle President Biden’s economic agenda.
As they presented their plan, Democrats on Monday once again sounded dire warnings about consequences of failure, which they said could destabilize global markets, shutter critical federal services during a 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, arguing that the debt ceiling helps cover prior spending, including the roughly $900 billion coronavirus relief package approved by both parties last year.
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“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 E. 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."
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McConnell, though, rejected the argument — and said Democrats would have to go at it alone at a time when they are seeking trillions of dollars in new spending that he described as “permanent socialism.” While the GOP leader said the party would support a standalone bill that funds the government, he emphasized: “We will not support legislation that raises the debt limit.”
The move sets up a fierce sprint on Capitol Hill over a deadline-laden next few weeks. Congress must fund the government before October 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 an unprecedented fiscal and economic calamity.
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The debates have taken on additional political significance at a time when Democrats simultaneously seek to move two major spending packages that fulfill the thrust of Biden’s economic agenda. That includes a roughly $1 trillion plan to improve the nation’s roads, highways, pipes, ports and Internet connections, as well as an up-to $3.5 trillion proposal to rethink federal education, immigration, health care and tax laws. The future of those packages similarly hang in the balance in the days ahead, since House Democrats gave themselves a loose, end-of-September deadline to adopt that spending despite their growing, internal divides.
The weighty issues looming over Democrats 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 — and into October.
“What we’re focused on is the fact that these are things that we absolutely have to do as country,” he continued. “These are not frivolous matters.”
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The flurry of activity sets up a furious, last-minute sprint for Pelosi and Schumer in the final weeks of September. And it 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 increasingly fractious party together.
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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 in the middle of a pandemic. Democrats unveiled their plan Monday, and started the process by which they hope to bring it to the House floor this week. Their 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 the following year.
As part of the measure, Democrats 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.
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But the future of the measure remains in doubt, since Democrats require Republican votes to advance it in the nearly deadlocked Senate. The prospect of a stalemate that shutters key government agencies and programs only has grown in recent days, since Democrats tacked an additional element onto their continuing resolution — an effort to address the debt ceiling.
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The ceiling corresponds to the amount the U.S. government can borrow to pay its past bills. Democrats and Republicans previously suspended it until the end of July, at which point the Treasury Department has said it likely has until mid-October before it runs out of money and risks default — a potentially catastrophic global financial event.
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 fiscally critical threshold. Senate Minority Leader Mitch McConnell (R-Ky.) reiterated the position last week, even as he told Punchbowl News that the United States “must never default.”
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The Republicans’ potential blockade has enraged Democrats, who have stressed repeatedly in recent days that the GOP opposition is hypocritical since both parties had banded together to raise the ceiling under President Trump, under whom the country added $7 trillion to the debt. Those debts include stimulus programs enacted on a bipartisan basis last year as well as Trump’s own priorities, such as building a wall on the U.S.-Mexican border, which Democrats did not support anyway.
“I would hope that Republican friends will get beyond politics and do what’s necessary to keep this country moving forward and keep us financial integrity in place,” said Rep. James E. Clyburn (D-S.C.), the House majority whip, during an appearance Sunday on CNN’s “State of the Union.”
As part of the new proposal, unveiled Monday, Democrats have chosen to suspend the ceiling until December 2022. The standoff recalled the brinkmanship from roughly a decade ago, when Republicans held firm against raising the debt ceiling in a move that rattled global markets.
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“The position that Republicans, primarily my senator, Mitch McConnell, have taken, is totally irresponsible,” Yarmuth said.
Democrats have an additional option, as they could choose to address the debt ceiling as part of their $3.5 trillion package that proposes massive overhauls to federal health care, education, immigration, climate and tax laws. They intend to move that bill through a process known as reconciliation, which allows party lawmakers to sidestep GOP filibuster in the Senate, since it does not require 60 votes before passage.
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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.
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In a letter to Democratic lawmakers, House Majority Leader Steny H. Hoyer (D-Md.) on Friday sketched out the early road map for the proposal. He said the chamber in the final weeks of September would “enact President Biden’s economic recovery agenda,” though he did not specific a date, and adopt the bipartisan $1 trillion infrastructure bill that the Senate approved in early August.
In bring those measures for a vote, Democrats have performed a delicate political dance. To begin debate on reconciliation, party leaders had to strike a deal with moderates, committing that they would begin considering the $1 trillion in public-works investments on Sept. 27. But Democrats’ more liberal-leaning members have pledged to vote against the infrastructure deal at that time unless they first complete work on the reconciliation package, a process that is still far from finished.
The potential, internal standoff has created new headaches for Pelosi, Schumer and other Democratic leaders. Even Biden has intervened, meeting privately on Friday with two potential holdouts — Sens. Joe Manchin III (D-W.Va.) and Kyrsten Sinema (D-Ariz.) — to try to address their spending concerns.
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One Senate Democratic aide, speaking on the condition of anonymity to describe the party’s internal thinking, said there is no chance the Senate can complete its work on time given the scope of policy issues that remain. House lawmakers barreled through the process to craft nearly 2,600 pages of legislative text last week, though disagreements remain among Democrats in the two chambers over its spending plans and proposed tax increases.
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A Democratic lawmaker in the House, who similarly spoke on the condition of anonymity, privately confided there are many centrists in the chamber who share Manchin and Sinema’s views and may seek to whittle down the package’s size as the debate heads to the House floor. Other debates also plague House Democrats, including a smoldering fight over prescription drug pricing reforms that could result in defections that Pelosi cannot afford.
With the clock ticking, Clyburn on Sunday raised the “possibility” that the debate — including the planned late-September infrastructure vote — could slip into October. “We are going to work hard to reach that goal and sometimes you have to kind of stop the clock to get to the goal,” he said. “We’ll do what’s necessary to get there.”
And Yarmuth raised the potential that the House could be in the odd position of adopting an infrastructure bill, only to refrain from transmitting it to the president, as Democrats looked to keep their various factions satisfied.
The nine centrists who helped orchestrate the deadline, meanwhile, have signaled they expect Pelosi to hold up her end of the deal. Citing leadership’s past comments, the group led by Rep. Josh Gottheimer (D-N.J.) said in a letter Friday they “cannot afford to delay a single day longer when our nation’s infrastructure is crumbling.”
- Mike DeBonis contributed to this report.