House Democrats on Wednesday narrowly passed a stand-alone bill to suspend the debt ceiling, likely averting a government shutdown Thursday but leaving open the possibility that the U.S. could default on its debts next month.
In a 219-212 party-line vote, House Speaker Nancy Pelosi secured passage of a bill to suspend the cap on how much the government can borrow to pay for federal expenditures, such as bureaucratic salaries and Social Security, until December 2022.
“We all know the full faith and credit of the United States of America should not be questioned,” said Mrs. Pelosi, California Democrat. “This is in the Constitution … Congress has addressed the debt limit 78 times since 1960, 29 times with a Democrat in the White House [and] 49 times under Republican presidents.”
Senate Republicans, led by Minority Leader Mitch McConnell of Kentucky, are refusing to vote to raise the debt ceiling.
Mrs. Pelosi and Senate Majority Leader Charles E. Schumer, New York Democrat, initially tried strong-arming Republicans into backing the debt suspension by tying it to a short-term government funding measure and disaster aid. That gambit failed in the Senate this week at the hands of GOP filibuster.
The realization that Mr. McConnell was not bluffing in his opposition to raising the debt ceiling forced Democrats to pivot. Mr. Schumer opted to resubmit the short-term funding measure for a Senate vote without the debt-ceiling hike.
“We can approve this measure quickly and send it to the House so it can reach the president’s desk before funding expires at midnight tomorrow,” Mr. Schumer said. “With so many critical issues to address, the last thing the American people need right now is a government shutdown.”
The federal budget year ends Sept. 30.
While the maneuver probably averts a government shutdown, it kicks the can down the road on the debt-ceiling. Republicans refuse to provide any votes for suspending the debt ceiling, arguing that Democrats should do it unilaterally via budget reconciliation. The process, which Democrats are poised to use to pass President Biden’s $3.5 trillion expansion of the federal safety net, allows certain spending and tax measures to avert the Senate’s 60-vote filibuster threshold and pass with a simple majority.
“If Democrats want to use fast-track, party-line procedures to ram through trillions more in inflationary socialism, they’ll have to use the same tools to handle the debt limit,” Mr. McConnell said.
Democratic leaders are wary of using the process to deal with the debt ceiling because under reconciliation rules they would have to specify an exact new ceiling for the nation’s borrowing limit. Such an amount, which would be above the current limit of $28.8 trillion, opens vulnerable Democrats to attack during next year’s midterm elections.
Mrs. Pelosi’s decision to push through a standalone debt ceiling bill, which to succeed will require at least 10 Republican supporters in the evenly split Senate, signals that reconciliation is off the table.
That means Senate Democrats and Republicans are headed toward another showdown over the new few weeks. Few expect Mr. McConnell’s forces to fold.
“Democrats could have raised the debt ceiling by themselves, months ago or weeks ago or last week or this week if they had pursued the procedures available to them,” said Sen. Pat Toomey, a Pennsylvania Republican and key congressional dealmaker. “There’s not a thing Republicans could have done to stop it, they can do it with the simple majority but we know this, everybody knows this.”
Treasury Secretary Janet Yellen told Congress this week the federal government faces a hard deadline of Oct. 18 to lift the debt limit and avoid defaulting on U.S. debts.
The national debt stands at $28.8 trillion.