Members of the House are scrambling back to Washington Tuesday to approve a short-term lift of the nation’s debt limit and ensure the federal government can continue fully paying its bills into December.
The $480 billion increase in the country’s borrowing ceiling cleared the Senate last week on a party-line vote. The House is expected to approve it swiftly so President Joe Biden can sign it into law this week. Treasury Secretary Janet Yellen had warned that steps to stave off a default on the country’s debts would be exhausted by Monday, and from that point, the department would soon be unable to fully meet the government’s financial obligations.
A default would have immense fallout on global financial markets built upon the bedrock of U.S. government debt. Routine government payments to Social Security beneficiaries, disabled veterans, and active-duty military personnel would also be called into question.
“It is egregious that our nation has been put in this spot, but we must take immediate action to address the debt limit and ensure the full faith and credit of the United States remains intact,” said House Majority Leader Steny Hoyer, D-Md.
But the relief provided by the bill’s passage will only be temporary, forcing Congress to revisit the issue in December — a time when lawmakers will also be laboring to complete federal spending bills and avoid a damaging government shutdown. The yearend backlog raises risks for both parties and threatens a tumultuous close to Biden’s first year in office.
The present standoff over the debt ceiling eased when Senate Republican leader Mitch McConnell, R-Ky., agreed to help pass the short-term increase. But he insists he won’t do so again.
In a letter sent Friday to Biden, McConnell said Democrats will have to handle the next debt-limit increase on their own using the same process they have tried to use to pass Biden’s massive social spending and environment plan. Reconciliation allows legislation to pass the Senate with 51 votes rather than the 60 that’s typically required. In the 50-50 split Senate, Vice President Kamala Harris gives Democrats the majority with her tiebreaking vote.
In his focus on the debt limit, McConnell has tried to link Biden’s big federal government spending boost with the nation’s rising debt load, even though they are separate and the debt ceiling will have to be increased or suspended regardless of whether Biden’s $3.5 trillion plan makes it into law.
“Your lieutenants on Capitol Hill now have the time they claimed they lacked to address the debt ceiling through standalone reconciliation, and all the tools to do it,” McConnell said in the letter. “They cannot invent another crisis and ask for my help.”
McConnell was one of 11 Republicans who sided with Democrats to advance the debt ceiling reprieve to a final vote. Subsequently, McConnell and his GOP colleagues voted against final passage.
Agreement on a short-term fix came abruptly. Some Republican senators said threats from Democrats to eliminate the 60-vote threshold for debt ceiling votes — Biden called it a “real possibility” — had played a role in McConnell’s decision.
“I understand why Republican leadership blinked, but I wish they had not,” said Sen. Ted Cruz, R-Texas.
The current debt ceiling is $28.4 trillion. Both parties have contributed to that load with decisions that have left the government rarely operating in the black.
The calamitous ramifications of default are why lawmakers have been able to reach a compromise to lift or suspend the debt cap some 18 times since 2002, often after frequent rounds of brinkmanship.
“Global financial markets and the economy would be upended, and even if resolved quickly, Americans would pay for this default for generations,” warned a recent report from Moody’s Analytics.