UPDATE: Biden signs debt limit hike, but December standoff looms

National
THURSDAY 10/14/2021 8:15 p.m.

WASHINGTON (AP) — President Joe Biden on Thursday signed into law a bill raising the nation’s debt limit until early December, delaying the prospect of an unprecedented federal default that would cause economic disaster.

The House passed the $480 billion increase in the country’s borrowing ceiling on Tuesday, after the Senate approved it on a party-line vote last week. The eventual approval came after a protracted standoff with Senate Republicans, who derailed initial Democratic efforts with filibusters, delays that require 60 votes to halt.

Ultimately, a handful of Senate Republicans agreed to join Democrats and voted to end GOP delays and move to a final vote on the legislation, but Minority Leader Mitch McConnell has said Republicans will offer no support for another increase in December.

Treasury Secretary Janet Yellen had warned that the U.S. would hit its borrowing limit Monday, an unprecedented situation that she and others cautioned could lead to economic catastrophe for a nation still reeling from a global pandemic. Routine government payments to Social Security beneficiaries, disabled veterans and active-duty military personnel would potentially be delayed, and the economic fallout in the U.S. could ripple through global markets.

The passage of the short-term debt ceiling increase ensures that, for now, the U.S. will continue to meet its obligations. But it sets up another potential cliff at the end of the year — at a time when lawmakers will also be working to pass a federal funding bill to avert a government shutdown.

Republicans have said Democrats should use a budgetary maneuver to pass an increase in the debt limit without Republican support, like the process Democrats are using for Biden’s massive climate change and social safety net plan. But Democrats have resisted that option. The clash between the two parties leaves Congress without a clear solution to avert the next default deadline in December, but the White House has emphasized it is still pursuing a bipartisan increase.

Lawmakers from both parties have used the debt ceiling votes as leverage for other priorities. House Speaker Nancy Pelosi threatened to vote against raising the debt ceiling when President Donald Trump was in office, saying she had no intention of supporting lifting the debt ceiling to enable Republicans to give another tax break to the rich. And Republicans in 2011 managed to coerce President Barack Obama into accepting about $2 trillion in deficit cuts as a condition for increasing the debt limit — though lawmakers later rolled back some of those cuts.

Original: House sends debt limit hike to Biden, staving off default

TUESDAY 10/12/2021 6:41 p.m.

WASHINGTON (AP) — Members of the House on Tuesday pushed through a short-term increase to the nation’s debt limit, ensuring the federal government can continue fully paying its bills into December and temporarily averting an unprecedented default that would have decimated the economy.

The $480 billion increase in the country’s borrowing ceiling cleared the Senate last week on a party-line vote.

The House approved it swiftly so President Joe Biden can sign it into law this week. Treasury Secretary Janet Yellen had warned that steps to stave off a default on the country’s debts would be exhausted by Monday, and from that point, the department would soon be unable to fully meet the government’s financial obligations.

A default would have immense fallout on global financial markets built upon the bedrock safety of U.S. government debt. Routine government payments to Social Security beneficiaries, disabled veterans, and active-duty military personnel would also be called into question.

The relief provided by the passage of the legislation will only be temporary though, forcing Congress to revisit the issue in December — a time when lawmakers will also be laboring to complete federal spending bills and avoid a damaging government shutdown. The yearend backlog raises risks for both parties and threatens a tumultuous close to Biden’s first year in office.

“I’m glad that this at least allows us to prevent a totally self-made and utterly preventable economic catastrophe as we work on a longer-term plan,” said Rep. Jim McGovern, D-Mass. Republicans signaled the next debt limit debate won’t be any easier and warned Democrats not to expect their help.

“Unless and until Democrats give up on their dream of a big-government, socialist America, Republicans cannot and will not support raising the debt limit and help them pave the superhighway to a great entitlement society,” said Rep. Tom Cole, R-Okla. Procedurally, the House took a single vote Tuesday that had the effect of passing the Senate bill. The measure passed by a party-line vote of 219-206.

The present standoff over the debt ceiling eased when Senate Republican leader Mitch McConnell, R-Ky., agreed to help pass the short-term increase. But he insists he won’t do so again.

In a letter sent Friday to Biden, McConnell said Democrats will have to handle the next debt-limit increase on their own using the same process they have tried to use to pass Biden’s massive social spending and environment plan. Reconciliation allows legislation to pass the Senate with 51 votes rather than the 60 that’s typically required. In the 50-50 split Senate, Vice President Kamala Harris gives Democrats the majority with her tiebreaking vote.

Lawmakers from both parties have used the debt ceiling votes as leverage for other priorities. House Speaker Nancy Pelosi threatened to vote against raising the debt ceiling when President Donald Trump was in office, saying she had no intention of supporting lifting the debt ceiling to enable Republicans to give another tax break to the rich. And Republicans in 2011 managed to coerce President Barack Obama into accepting about $2 trillion in deficit cuts as a condition for increasing the debt limit — though lawmakers later rolled back some of those cuts.

Pelosi told reporters Tuesday that over the years Republicans and Democrats have voted against lifting the debt ceiling, “but never to the extent of jeopardizing it.”

Pelosi offered her hope that Congress would lift the debt ceiling in a bipartisan way this December because of the stakes involved. But she also floated a bill sponsored by Rep. Brendan Boyle, D-Pa., that would transfer the duty of raising the debt limit away from Congress and vest it with the Treasury secretary, saying, “I think it has merit.”

In his focus on the debt limit, McConnell has tried to link Biden’s big federal government spending boost with the nation’s rising debt load, even though they are separate and the debt ceiling will have to be increased or suspended regardless of whether Biden’s $3.5 trillion plan makes it into law.

“Your lieutenants on Capitol Hill now have the time they claimed they lacked to address the debt ceiling through standalone reconciliation, and all the tools to do it,” McConnell said in a letter to the president. “They cannot invent another crisis and ask for my help.”

McConnell was one of 11 Republicans who sided with Democrats to advance the debt ceiling reprieve to a final vote. Subsequently, McConnell and his GOP colleagues voted against the final passage. The debate over the debt ceiling has at times gotten personal. McConnell last week suggested that Democrats were playing “Russian roulette” with the economy because they had not dealt with the debt ceiling through the process he had insisted upon. He called out Pelosi for traveling to Europe last week.

“I can only presume she hopes the full faith and credit of the United States will get sorted out,” McConnell said. Pelosi did not let the shot pass. “Russian roulette from Moscow Mitch. Interesting,” she said.

House Majority Leader Steny Hoyer, D-Md., said Tuesday’s vote marked the 50th time dating back to President Ronald Reagan that he has voted on extending the debt limit.

“Nobody has clean hands when it comes to the debt limit,” he said. Because the Senate bill only allowed for a stopgap extension, Hoyer called it a “lousy deal.”

“And then we’re going to play this game one more time, a despicable and irresponsible act for adults who know better,” Hoyer said. Rep. Chip Roy, R-Texas, said he wanted to “thank” Hoyer for sharing that he had previously voted for raising the debt ceiling 49 times.

“When he came into this body, the debt was about a trillion dollars,” Roy said. “Thank you, I guess, on behalf of the people of America who are staring at 28-and-a-half trillion dollars of debt.”

The current debt ceiling is $28.4 trillion. Both parties have contributed to that load with decisions that have left the government rarely operating in the black. The calamitous ramifications of default are why lawmakers have been able to reach a compromise to lift or suspend the debt cap some 18 times since 2002, often after frequent rounds of brinkmanship.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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