Debt limit showdown in Congress looms ahead of October deadline
WASHINGTON – Congress is heading for a high-stakes controversy over the debt ceiling as the Treasury Department says the U.S. government will run out of money to pay bills next month.
In a letter to congressional leaders on Wednesday, Finance Minister Janet Yellen warned of a late October deadline that would likely raise the debt ceiling. “The most likely outcome is that cash and extraordinary measures run out in October,” she wrote. She said that “waiting until the last minute” to resolve the issue could “seriously damage business and consumer confidence.”
Lawmakers from both parties have repeatedly warned that failing to raise the debt limit would be disastrous for the US economy, but that hasn’t stopped Republicans from trying to capitalize on concessions when a Democrat took over the White House by withholding support.
House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Mitch McConnell, R-Ky., are at an impasse over how to approach the issue.
McConnell wants Democrats to lift the debt limit without any Republican support — a position that would allow his members to avoid any political heat while allowing them to criticize the side. the other side of the aisle.
But Pelosi told reporters on Wednesday that House Democrats would not raise the debt limit in a multibillion-dollar social safety net package, which they are expected to pass without backing. House of the Republican Party.
One option Democrats are weighing is to attach the debt limit increase to the government funding bill, which must be passed by September 30 to prevent a government shutdown. Pelosi said the vehicle has yet to be decided.
“We’re going to have some options. We’ll make them known to you as we narrow and move on. But it has to happen,” she said of the loan limit expansion. “We will not reconcile. No.”
But if Democrats don’t raise the debt ceiling in a recession-proof budget, it will take at least 10 Republicans in the Senate to agree to raise the limit.
McConnell has said that since Democrats are proposing trillions of dollars in new spending, they should raise the borrowing limit themselves.
This week, a McConnell aide pointed to a speech last month in which he explained his position, which has been supported by many Republican senators.
“Democrats have all the tools available now that they need to raise the debt limit on a partisan basis,” McConnell said August 9 before the Senate left for a recess. “If they want 50 Democratic votes to spend trillions and trillions more, they can find 50 Democratic votes to fund it.”
McConnell said Democrats are behaving like a friend who are “flying to Las Vegas to blow all his money” and “want you to co-sign a loan for him before he leaves.”
The debt limit is a self-imposed obstacle that the United States has created to meet its obligations, which Congress typically addresses. Raising it will not allow for new spending or debt; it simply allows the government to borrow money to pay the bills that Congress has accumulated.
It remains to be seen whether Democrats will approve their multi-million dollar package to continue funding bipartisan government activities such as domestic and military spending.
Now, solving the problem will require one side to take advantage of the deadlock.
Debt limits tend to become a political football under Democratic presidents when Republicans criticize them for spending. Elevating it on a partisan basis could be a painful vote for some Democrats and expose them to GOP offensive ads, which is why the party wants to have bipartisan bribery.
Senate Majority Leader Chuck Schumer, DN.Y., said that Republicans “taking hostages within the debt limit would be “the pinnacle of irresponsibility,” calling it “an act of horrors.” and despicable “.”
Pelosi said Democrats support multiple increases in the debt limit under former President Donald Trump even though Republicans have added to the debt by cutting taxes on a partisan basis.
“In the Trump administration, accumulated debt is more than $7 trillion – that’s what the debt ceiling lift is paying for… we’re paying Trump’s credit card,” Pelosi told reporters. pellets. “When President Trump is president, we Democrats support lifting the debt ceiling because it’s the responsible thing to do. I hope that Republicans will act in the same responsible way.”
She said that “even the threat not to lift it” could harm the US credit rating.
In 2011, after Republicans used the debt limit to extract concessions from then-President Barack Obama, McConnell told The Washington Post that most GOP members didn’t think “a matter of default.” is a hostage you might get a chance to shoot,” but they know it’s “a ransom-worthy hostage.”
Doug Andres, spokesman for McConnell Reply on Twitter to Pelosi: “The Democrats now control Washington. They can raise the debt limit on their own. This will be a crisis of their own making.”
Teaganne Finn and Frank Thorp DRAW contributed.