House passes funding, debt ceiling bill
Speaker of the House Nancy Pelosi (D-CA) leaves after holding her weekly press conference at the U.S. Capitol on August 25, 2021 in Washington, DC.
Getty images The House approved Tuesday a bill that would prevent the government from shutting down and also suspend the debt limit to help avoid economic disaster.| Getty Images
The House passed a bill Tuesday that would both prevent a government shutdown and suspend the debt limit in a step toward preventing possible economic calamity.
It was approved by the Democratic-controlled chamber in a 220 212 vote.
However, Senate Republicans have threatened to spike the bill, which could leave Democrats scrambling to find another way to avoid a federal funding lapse — or even a first-ever default on U.S. debt. Worries about a looming default and the economic damage it would cause contributed to a U.S. stock market drubbing on Monday.
Congress has to pass a funding plan by Sept. 30 to prevent a shutdown. Treasury Secretary Janet Yellen told Congress that the U.S. will run out of options for continuing to pay its bills in October.
This House-passed plan will keep the government in operation until Dec. The debt ceiling would be suspended until Dec. 2022.
It would allocate $28.6 million for natural disaster relief, and $6.3 billion to resettlement aid for Afghan refugees.
Senate Minority Leader Mitch McConnell, R-Ky., has said Republicans will vote for a standalone funding bill but not legislation with a debt limit suspension attached.
Democrats pointed out the fact that Republicans signed off on massive emergency coronavirus aid bills during the suspension of the debt ceiling. Republicans, however, have called on their counterparts to take steps to stop default and pass the mammoth spending bill.
Senate Majority Leader Chuck Schumer (D-N.Y.), warned Republicans ahead of the House vote that failing to raise the debt limit could have devastating effects on the economy, as well as critical benefits like Social Security.
It is like playing with fire. “This is playing with fire. It’s playing with debt and placing it on the backs of Americans,” he stated Tuesday.
The next steps for Democrats if legislation in the Senate fails are not known.
The Democrats could add a suspension of the debt ceiling to their $3.5 trillion budget reconciliation legislation. This would increase the complexity and length of an already complicated and lengthy process.
The centerpiece of President Joe Biden’s domestic agenda would see massive investments made in social safety net and climate policies. Republicans demand that Democrats tie the debt limit suspension and the massive bill to Democrats. Democrats would like to pay this bill through tax hikes on the rich and corporations.
This is a developing story. Keep checking back for more updates.