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© Bloomberg. Steny Hoyer Photographer: Al Drago/Bloomberg

(Bloomberg) — The House will vote next week to raise the nation’s $28 trillion debt ceiling, but a political standoff between Democrats and Republicans still threatens to send the U.S. into a payments default next month. 

According to the Treasury Department, default could occur in October if Congress does not act. Senate Republicans stated that Democrats need to deal with the debt limit themselves, and that they would vote against any increase. It would be blocked under standard procedures that require 60 votes from the Senate.

In a scheduling notice, Steny Hoyer, House Majority Leader, stated Friday that next week’s House vote will be on a must pass stopgap measure for government operations beyond the Sept. 30 fiscal year end. It also includes the debt ceiling. However, no decision was made on the inclusion of the debt ceiling provision into the other bill.

Hoyer indicated that the spending solution would also provide new funds for disaster recovery and processing Afghan refugees. According to someone familiar with the bill, Democrats want a temporary solution that will last until Dec. 3.

The Senate Republican filibuster could be bypassed by Democrats using the special fast-track budget procedure. However, Democrats insist the responsibility of increasing the ceiling on each party. This could change as the deadline approaches.

Hoyer indicated that next week, the House would also be voting on an annual defense policy bill as well as any related legislation. 

Hoyer stated that he will bring the $550 million bipartisan infrastructure bill, which was a fulfillment of a promise made by House leaders to moderate Democrats. The House also plans to vote on its version President Joe Biden’s tax and spending proposal during the current work period, which ends Oct. 1.

House Speaker Nancy Pelosi could face rebellion by progressives within her caucus when she votes on the infrastructure bill. 

Progressives demanded that the $3.5 trillion tax and spending bill, which is larger than the current infrastructure vote, be enacted prior to the vote. It now seems unlikely that this will happen. 

Although policy committees are now finished with work on the bigger bill, substantial differences still remain between the Senate’s caucus as well as the Senate regarding the scope and content of the larger bill.

©2021 Bloomberg L.P.

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