What You Need to Know
- The risky move, risky move backed by President Joe Biden, assures a potentially damaging showdown with Republicans.
- The debt ceiling would be suspended through December 2022; stopgap funding would last through Dec. 3, 2021.
- The standoff is thought to be one contributor to the rout in stocks Monday; The Treasury market is showing some signs of concern.
House Democrats will include a suspension of the U.S. debt ceiling in a spending bill needed to keep the government open past the end of this month, a risky move backed by President Joe Biden that assures a potentially damaging showdown with Republicans.
The debt ceiling would be suspended through December 2022, which would push that battle past the mid-term congressional elections. The stopgap funding bill would last through Dec. 3, 2021, a person familiar with the legislation said — setting up another fight to keep the government operating at the end of this year.
But those dates may not matter, with Republicans and Democrats completely at odds over the debt limit. Without a shift in position by one of the two parties, the decision to combine the temporary funding measure and the debt ceiling leaves the U.S. on course for a government shutdown and defaults on federal payments as soon as next month.
“This week, the House of Representatives will pass legislation to fund the government through December of this year to avoid a needless government shutdown that would harm American families and our economic recovery before the September 30th deadline,” House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer said in a joint statement, referring to the government’s fiscal-year deadline. “The legislation to avoid a government shutdown will also include a suspension of the debt limit through December 2022.”
Biden tweeted his support Monday afternoon, saying Pelosi and Schumer are acting “to keep the government open, provide disaster relief, and avoid catastrophic default.”
Republicans have said they won’t vote to raise the debt ceiling as long as Democrats are pressing ahead with a partisan tax and spending plan encompassing much of Biden’s economic agenda. The White House and congressional Democratic leaders have insisted that the debt limit vote should be bipartisan.
“This is a bipartisan responsibility, just as it was under my predecessor,” Biden tweeted. “Blocking it would be inexcusable.”
The majority party aims to pressure Republicans into backing down on their threat by attaching it to the stopgap bill. The legislation also includes money for hurricane and wildfire disaster aid, which could make the package more difficult for some Senate Republicans — particularly from hard-hit hurricane states like Louisiana — to vote against.
Even so, it would likely be difficult to convince 10 Republicans to vote with Democrats in the Senate, where the package requires 60 votes for passage.
Republicans and Democrats are also in a dispute over Afghan aid tied to the stopgap bill and whether to include additional funds to vet refugees, according to a person familiar with the talks.
Senate GOP leader Mitch McConnell on Monday reiterated that Republicans “will not support legislation that raises the debt limit.”