Democrats raise the bar in risky debt ceiling fight

Speaker Nancy PelosiNancy PelosiBiden pushes Democrats back on taxes Yarmuth and Clyburn suggest .5T package could be lightened From partisan fights and follies, or why Democrats should follow Manchin, not Sanders MORE (D-California), Senate Majority Leader Charles SchumerChuck SchumerBiden discusses agenda with Schumer and Pelosi ahead of pivotal week CEOs urge Congress to raise debt ceiling or risk ‘avoidable crisis’ (DN.Y.) and Senate Minority Leader Mitch mcconnellAddison (Mitch) Mitchell McConnellTrump Seeks Challenger For McConnell As Senate GOP Leader: President Budget Report: Tackling Debt Ceiling “A Ridiculous Position To Be” Buckle Your Belt For More Trump, With The kind permission of the Democratic Party MORE (R-Ky.) Are playing a risky chicken game on government funding and increasing the nation’s borrowing limit.

Pelosi and Schumer upped the ante on Monday by announcing they would force Republicans to vote next week on a short-term government funding measure that includes legislation to raise the country’s debt ceiling.

The legislation will also include about $ 20 billion to respond to recent disasters, ranging from damage caused by hurricanes in the Gulf states to millions of acres burned by wildfires in the West.

Republicans insist they will not vote on any package that includes an increase in the debt ceiling, which they say Democrats should do on their own despite decades of members of both parties voting to raise the borrowing limit to pay for past spending allowed by Democrats and Republicans alike.

By combining the two measures, Democrats hope the GOP will take public responsibility for shutting down the government if Republicans block the measure in the upper house.

The standoff could lead to the government shutdown at the end of next week and cause a crisis of confidence in the country’s credit rating, which last happened when Democrats and Republicans found themselves in a deadlock on the debt ceiling in 2011.

McConnell made it clear last week that Republicans would vote against any proposal to lift the debt ceiling, even if paired with legislation to keep federal departments and agencies funded beyond September 30. He then doubled that position on Monday.

“Senate Republicans would support a clean, ongoing resolution that included appropriate disaster relief and targeted Afghan assistance. We will not support legislation that increases the debt ceiling, ”McConnell said from the Senate.

But Democrats don’t want to bow down to McConnell, who has urged them to include a debt ceiling increase in a separate $ 3.5 trillion budget reconciliation plan the party is preparing. This bill cannot be obstructed, which means Democrats can. President BidenJoe BidenCapitol’s fencing begins to drop after ‘Justice for J6′ rally Senate MP rejects Democrats’ immigration plan Biden pushes Democrats back on taxes MOREoffice if they can stay united.

Pelosi and Schumer argue that the debt ceiling hike should be supported by members of both parties because it covers spending backed by Democrats and Republicans.

“The American people expect our fellow Republicans to take responsibility and pay off the debts they proudly helped incur in the December 2020 COVID ‘908’ package that helped American families and small businesses to recovering from the COVID crisis, ”Democratic leaders. wrote in their joint statement announcing their strategy.

McConnell’s strategy centers on the $ 3.5 trillion reconciliation plan that Republicans unanimously oppose. He wants Democrats to take the political blow for raising the debt ceiling as he and other Republicans criticize the majority party for their large measure of spending.

The financial markets are starting to take an interest in the chicken game. The Dow Jones Industrial Average plunged more than 900 points on Monday before rebounding slightly before the close.

Monday’s stock decline was mostly attributed to fears about the Chinese real estate market, but the political storm brewing around US debt was also cited as a factor.

Democratic and Republican congressional leaders are publicly predicting that the other side will be blamed for any late-September explosion over government funding and the country’s creditworthiness.

But both sides face political repercussions if there is a political train crash next week.

“If the Republicans brought our country into default, our country could actually be plunged into recession, laying off millions of people, making it harder for people to pay for food on the table, their mortgages and their rents, “Schumer told the Senate. .

Democrats face another problem in using the budget reconciliation package to raise the debt ceiling. The budget resolution passed by both chambers last month did not include a reconciliation instruction to raise the debt limit. As a result, Senate Democrats are expected to have another lengthy room debate and a-rama vote to amend the budget resolution to allow the debt limit to be increased with only Democratic votes.

“That will not happen,” predicted a Democratic senator from the budget committee after his caucus held a meeting on the debt-limiting strategy.

Some Democrats are confident that McConnell and his Senate GOP colleagues will be blamed for the government shutdown and any economic crisis surrounding a defeat of debt limitation legislation, but they recognize that Biden could take a hit as well.

Asked whether a shutdown and the ensuing market turmoil could politically harm Biden, the Senate Majority Whip Dick durbinDick Durbin Senate MP rejects Manchin Democrats’ immigration plan lets Washington guess what he wants Democrats hope Biden can topple Manchin and Sinema MORE (D-Ill.) Said “he might.” But Durbin said Republicans would clearly be the real culprits.

“The fingerprints are obvious. McConnell brags about having the power to do this, so it’s not about whether Biden didn’t do the right thing. It’s in Congress. It is our responsibility, ”said Durbin.

Some Democrats worry that the last thing Biden needs right now is a debt crisis. Its political position, especially among the independents, has deteriorated considerably since the end of July.

The decline in support for Biden is attributed to the disorderly exit of US troops from Afghanistan and the surge of COVID-19 infections in the country, which in turn dampened enthusiasm for the economy.

A Democratic Senate aide said “it is very difficult to imagine a world in which he does not fall back on Biden” if the government shuts down or if the credit bureaus downgrade the country’s credit status because of a political battle over the debt limit.

Republicans are also worried about a collapse in public funding and the debt ceiling.

His. John cornynJohn CornynSenate MP rejects Democrats’ immigration plan Democrats plead with Senate MP for 8 million green cards Democrats to advocate for citizenship path in spending bill on Friday MORE (R-Texas), a member of McConnell’s management team, predicted cold heads will prevail next week, stressing that no one wants a shutdown that rattles the economy as it struggles with a winter wave COVID-19 infections and hospitalizations.

“I don’t think that’s going to happen,” he said, when asked about a possible government shutdown. “Nobody wants it.”