Explanation: What are Congress’ options for financing the government and raising the debt ceiling?
WASHINGTON, Sept.26 (Reuters) – The US Congress faces two looming deadlines to fund the government and tackle the $ 28.4 trillion national debt ceiling that will require delicate maneuvering from President Joe’s Democrats Biden over the next few weeks.
The first is the September 30 deadline to continue funding federal agencies or deal with the second partial government shutdown in three years, which would be embarrassing at a time when Washington continues to fight the coronavirus pandemic and scale up the economy.
In late October or early November, the US Treasury will run out of money to pay its bonds, meaning the government runs the risk of a historic default if Congress does not act.
Here’s how the two measures could be enacted in the coming weeks:
WHAT SHOULD BE DONE TO FINANCE THE GOVERNMENT?
Congress has until September 30 to avoid the start of a shutdown of government services, which would mean the closure of some national parks, fewer security checks at airports, a disruption of public health services during the pandemic of COVID-19 and possibly an interruption of services. checks to veterans and retirees and keep national parks open.
Democrats and Republicans mostly agree on the need to act quickly to keep the government running, and the House of Representatives has already approved a bill.
While Democrats have very slim majorities in both houses of Congress, Republicans can block the bill under Senate rules that require 60 of 100 members to agree on most laws. Republicans say they oppose the bill because it includes a temporary suspension of the debt limit, and while they oppose the U.S. government defaulting, they want Democrats to suspend the debt limit. debt limit without their votes.
The Senate could vote on the bill as early as Monday.
WHAT IF THE SENATE REPUBLICS BLOCK THE BILL?
If Senate Republicans follow through on their threat to block the bill, Democrats will have little time to act before the government begins to shut down.
They could simply remove the debt limit provision from the bill and rush to pass the revised bill in the House and then in the Senate.
This could be accomplished in just a few hours, depending on how close lawmakers are to the September 30 midnight deadline and whether both parties agree. But even a Republican in the Senate could slow things down by filibustering.
AND WHAT ABOUT THE DEBT LIMIT?
Democrats have two possible ways to suspend the debt ceiling and let it rise for a set period of time, as Congress spends more and more money with insufficient revenue to cover the bill. Goldman Sachs economists wrote in a note last week that the current stalemate is “the riskiest debt limit deadline in a decade.”
Former treasury secretaries and Federal Reserve officials have urged Republicans to support the increase. Democrats noted that they supported increasing Republican priorities during previous Republican administrations.
Democrats could present a stand-alone debt limit increase as a gamble that then there will be so much pressure on Republicans to join in whether they vote for the bill or refuse to “obstruct” it. in the Senate. The latter would allow the bill to pass by a simple majority of 48 Democrats, two independents and a decisive vote from Vice President Kamala Harris.
WHAT ABOUT BUDGETARY RECONCILIATION?
Budget reconciliation is a maneuver that bypasses the Senate’s normal 60-vote requirement to move a bill forward. It’s the technique top House Republican Mitch McConnell used to push through a pro-rich tax cut bill when his party controlled the Senate in 2017. Now in the minority, he wants Democrats are using it to pay off debt. that no Republican has to vote and take responsibility for raising the debt limit even if they want to.
But it’s complicated.
Democrats could try to incorporate debt ceiling language into Biden’s $ 3.5 trillion social spending bill. But the party is deeply divided over this bill and it is unclear whether moderates and progressives can agree to a compromise in time to avoid default.
Another option would be to draft a reconciliation bill that focuses solely on the debt ceiling. It also takes time, as bills trigger a much despised process called “vote-a-rama” with the potential for hundreds of amendments. The Senate has held several such sittings overnight over the past year.
A stand-alone increase in the debt ceiling using the reconciliation process would likely have to be approved by the parliamentarian of the Senate, as its use is tightly controlled.
Meanwhile, the Bipartisan Policy Center now estimates that the Treasury Department will fully exhaust its borrowing capacity between October 15 and mid-November. Unless Congress acts in time, the US government would likely fail.
Reporting by Richard Cowan; Editing by Scott Malone and Mark Porter
Our Standards: Thomson Reuters Trust Principles.