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This amounts to a challenge for Democrats: either they embrace increased debt along party lines, or they potentially possess the toxic policy of a credit default while Republicans stand on the sidelines. But Democrats are betting Republicans will have a different point of view in a few weeks, declining to explain how they will overcome GOP resistance, but instead predicting that McConnell’s side will blink. The result is a dangerous fiscal pool game between party leaders.
Senate Majority Leader Chuck Schumer “doesn’t need a single Republican vote, and I think he should move forward with that information,” said Sen. Thom Tillis (RN.C. ). “If he fails, I think he will own it. I hope they understand.”
Democratic aides have said the party will likely combine the increased debt ceiling with an interim spending bill that will be needed to avoid a shutdown at the end of next month. The House will pass and likely pass the combined measure first and then send it to the Senate, where Democrats are counting on enough Republicans to join them in order to avoid impending tax disaster.
“I predict, with absolute certainty, that this will resolve without incident. Because it still is, ”said Senator Brian Schatz (D-Hawaii).
Congress last flirted with a default ten years ago, a skirmish that downgraded credit ratings and rocked financial markets. But since then, the House and Senate have not come so close to a deadline that can lead to massive market losses and uncertainty that could slow President Joe Biden’s economic agenda.
This time around, it’s not just the usual GOP suspects who are speaking out against an increase in the debt ceiling early on. Senator Susan Collins (R-Maine) said in an interview that she had “serious reservations” about increasing the debt ceiling amid Democrats’ multibillion-dollar spending plans. If the Moderate Mainer does not commit to increasing the borrowing limit, that does not bode well for Biden’s party.
“It’s the perpetual dance of the debt limit. And what’s ironic is that much of the debt we’re being asked to account for has been accumulated under Donald Trump’s watch, ”said Rep. Gerry Connolly (D-Va.).
“At that time it was the four hooves and the muzzle in the trough,” Connolly added. “So for Republicans to suddenly pull out, the ‘we don’t believe in debt’ posture gives hypocrisy a bad name.”
The September pile-up is set to include more than government funding that expires at the end of next month, just as the Treasury Department begins to fail to use “extraordinary measures” to prevent the country from doing so. fault. A host of other programs expire this fall – including a moratorium on evictions that caused a huge headache for House leaders last week – a confluence of pressures that will weigh hard and swiftly on congressional leaders.
And the Senate is preparing to go out on vacation until mid-September, leaving little room for maneuver.
Despite the drama, Senior Democrats are not moved by McConnell’s stance against granting votes to raise the debt ceiling. Washington Senator Patty Murray, Democrat No. 3, observed: “No one wants to be responsible for a major economic disaster. So I guess it’s in the fall, he won’t say that.
Meanwhile, Senate Budget Chairman Bernie Sanders (I-Vt.) Carried a set of old quotes from McConnell on Monday, ready to answer the question.
“Look what I have here: these are all quotes from Mitch McConnell, who said, ‘We will never have America by default. “And he’s right,” Sanders said. “At the end of the day, Republicans understand that in the midst of Covid and climate change, they’re not going to destroy the economy.”
Democrats could always change course and change their budget resolution to include the debt ceiling on the House and Senate floors. They could even come back to the issue in September. But Murray, who sits on the budget committee, said his party had no plans to do so.
Treasury Secretary Janet Yellen endorsed the Democratic position Monday morning, calling for “raising or suspending the debt limit on a bipartisan basis.” She also noted the amount of debt accumulated under the former president; Trump cut taxes and also approved the spending increase.
Yet after passing a $ 1.9 trillion coronavirus bill, a $ 550 billion infrastructure bill – plus plans to pass a 3.5 trillion social spending bill. billion dollars – Democrats are approaching $ 6 trillion in new spending. Only a part is paid with new income.
Yellen’s statement came after a debate between Democratic leaders and the White House last week on how to handle this politically sensitive issue. Ultimately, they decided not to further complicate the $ 3.5 trillion social spending plan, which the White House sees as a key part of Biden’s legacy as president, Democrats familiar with. the discussions.
The two-party GOP shifting gears on the brink of collapse is also dizzying: McConnell and more than a dozen other Republican senators have just bypassed Biden’s infrastructure deal on an obstruction, giving him a huge victory. But now that Democrats are turning to their social spending program, Republicans are looking at a debt fight with far-reaching consequences.
“We’ve seen this movie before, but we’ve never seen anything so dramatic,” said Sen. John Cornyn (R-Texas), who is close to McConnell. “They want to spend an additional $ 3.5 trillion; I don’t think it’s unreasonable to say that they have to raise the debt ceiling themselves. And then take responsibility for it. “
If they can, Democrats want to avoid passing the two massive spending bills this year as well as lifting the debt ceiling on party lines – which would give Republicans an easy chance to present them as debauchery during the electoral campaign. But whatever their final strategy, Democratic leaders will need to reassure nervous moderates who fear the next terms will be defined by GOP attack ads calling them “tax and spend liberal.”
Some early Democratic polls have shown inflation to be a growing problem with voters, and many vulnerable party lawmakers privately fear that voting for a $ 3.5 trillion social spending package will exacerbate the problem. And while Republicans don’t have to watch the debt ceiling vote, moderate Democrats fear they will be forced into owning it.
The very prospect of such a debacle sparks another age-old wish among Democrats: to get rid of the debt ceiling once and for all.
“What we should do is raise it by a billion dollars. Just get rid of this damn problem,” said House Budget Speaker John Yarmuth (D-Ky.) In a statement interview “The debt ceiling is ridiculous. It is a horrible law.”
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