On Wednesday, the House of Representatives voted to suspend the debt limit until December 2022 to avoid a potentially catastrophic U.S. default. The legislation was mainly backed along party lines.
Republicans vow to sink a bill the House passed to avoid U.S. default
Two Democrats — Reps. Jared Golden of Maine and Kurt Schrader of Oregon — voted against the bill, and one Republican, Rep. Adam Kinzinger of Illinois, supported it.
Despite the seriousness of the situation and warnings from finance experts like billionaire Jamie Dimon, Republicans in the Senate have vowed to oppose the suspension of the debt ceiling.
If a solution is not found by October 18, the country will not be able to pay its bills. The situation could hurt the economy as it tries to recover after the damages caused by the coronavirus pandemic. Financial markets could also be impacted.
Senate Minority Leader Mitch McConnell has said for months that his party would not work with Democrats to raise the debt ceiling unless there were major concessions from the other side. However, many falsely assumed that he was just bluffing and it was nothing but political posturing.
It seems McConnell meant every word he said. Democrats are now scrambling to find a workable solution. While doomsday scenarios are all over the Internet and some banks are even preparing for them, most experts believe the U.S. will not default on its debt.
Congress tries to avoid a government shutdown at midnight
There is a tiny glimmer of hope for some; Congress will vote on Thursday to avoid a government shutdown. The Senate will start the process, and the House is expected to follow suit.
President Joe Biden will then sign the short-term appropriations bill that will fund the government through December 3rd. Democrats were hoping to pair government funding with the debt limit in a must-pass bill.
McConnell and the GOP struck down this option and will only vote to avoid a shutdown set to take place at midnight. Some wonder if Republicans will similarly cave on the debt ceiling before the Oct. 18 deadline.
Will Democrats save Biden’s agenda?
Democrats in Washington are trying to avert many crises at the same time. Biden and his party are also working hard to save his agenda after a bruising summer that saw the president’s poll numbers drop significantly.
The fall from grace is linked to a rise in COVID-19 cases during the summer and a chaotic withdrawal from Afghanistan after a 20-year war. The president is negotiating nonstop with members of his own party to find a sweet spot where some of his priorities can move forward.
A bipartisan infrastructure bill, which passed the Senate with broad support, is dividing Democrats in the House because some wanted for it to move in tandem with a $3.5 trillion budget reconciliation package that focuses on programs like the Advance Child Tax Credit.
Moderates have a problem with the price tag and want a quick vote on the infrastructure bill that passed the Senate. Progressives are afraid if they back the bipartisan bill, moderates will then turn around and dump the reconciliation bill and, with it, all their big priorities for the foreseeable future.
Biden is trying to get the two factions to understand that it would be best for the party’s prospects in the 2022 midterms if the two bills move forward without delay.
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