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Congress facing 3 major economic deadlines by year-end

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One man strolls past the U.S. Capitol as Washington’s government shuts down, September 30, 2021.

Leah Millis – Reuters| Reuters

Congress is not slowing down in its activity.

In the early autumn, lawmakers spent their fall jumping around high-stakes topics. Washington will need to be able to meet several deadlines in coming months to maintain the breakneck pace. This could have long-lasting implications for the country.

According to Janet Yellen, Treasury Secretary, the first deadline is Oct. 18. This date will be the point at which the U.S. won’t be able pay its bills unless Congress increases or suspends debt ceiling. Democratic leaders are also seeking to pass a bipartisan infrastructure bill as well as a larger plan for investing in the social security net, before transportation funding programs run out at October’s end.

To prevent the government from shutting down, Congress must act before December 3.

As lawmakers attempt to meet the deadlines, here’s what lies ahead.

Debt ceiling showdown

Congress failing to fix the debt limit could cause turmoil in financial markets and lead to higher borrowing costs. This would increase the possibility of an American default. This worst-case scenario may cost jobs in the United States and cause economic damage around the world.

While Yellen gave congressional leaders an estimated Oct. 18 deadlineShe noted that the Treasury might run out of options to pay its bills before or after this date. It is not clear how lawmakers will solve the crisis.

In recent weeks, Democrats made numerous attempts to lower the debt limit. The Senate Republicans have stopped all attempts to suspend the debt limit and will block this week’s attempt by Chuck Schumer, D.N.Y. Majority leader, to pass a House bill suspending the borrowing limit.

Republicans suggested that Democrats raise the ceiling or suspend it on their own, as Democrats prepare to approve an enormous bill to fund climate change policy and the social safety net. Democrats, including President Joe BidenThey argue that the GOP is taking a risky stance to gain political advantage as the U.S. faces economic chaos.

Refusing to increase the debt limit would not only prevent future spending but also make it impossible for the U.S. to pay its obligations. Democrats pointed out that Republicans were also part of the approval of trillions in emergency coronavirus assistance since the suspension of the borrowing limit in 2019.

The Treasury reports that Congress has increased or decreased the debt ceiling at least 78 times, since 1960. Although the process of addressing the debt limit is usually uneventful in practice, Republicans have made more use of the deadlines to their political advantage over the past decade. Republicans are looking at the 2020 midterms as an opportunity for them to defeat the Senate and House of Representatives. Republicans are planning to saddle Democrats in the 2020 midterms as part their strategy for retaking both the House of Representatives and the Senate.

The budget reconciliation process allows Democrats to pass legislation with no Republican support. A bill that is separate from the current budget plan of the party could allow them to increase their ceiling. It would be an investment in social security net and green energies.

Democrats are hopeful that Republicans will give ground when the Oct. 18 deadline nears, but GOP leaders don’t seem to be willing to change their position.

Biden’s economic strategies

Democrats own set an Oct. 31 target to pass both planks of Biden’s economic agenda.This date recognizes a hard deadline. If Congress fails to approve the infrastructure bill (which would renew the money for five more years), funding for certain surface transportation programs will expire at the end the month.

Democratic leaders acknowledged that they would need to approve both the bipartisan plan as well as their larger budget proposal in order for them to pass each. This means that the Oct. 31 deadline by which the Senate passes the infrastructure bill in the House is now the date for approval by both houses of Congress for the larger portion of Biden’s agenda.

Biden, congressional leaders more explicitly tied the two plans togetherAfter progressives in the House declared that they will not vote to approve the infrastructure bill until the Senate passes the social spending bill, the Senate approved the legislation. For the deadline to be met, the party will need to reach an agreement and then write the final legislation over the coming days.

Democrats have to tread carefully when trying to create a plan that both conservatives and liberals will agree with. It is likely that they will have to reduce the initial $3.5 trillion price tag for the bill.

The progressives considered this figure to be a compromise already. Senator Joe Manchin (D-W.Va.) has stated that he would not support an investment exceeding $1.5 trillion.

To pass a bill, Democrats need to have all 50 senators present. Their votes appear to be at most two: Sen. Kyrsten sinema, D.Ariz. and Manchin.

Biden had planned to make Michigan his next economic destination on Tuesday. He has been in separate discussions with progressives and House centrists this week.

The outcome of these negotiations will determine whether Congress is able to pass both a refresh in transportation, broadband, and utilities and the largest expansion of federal benefits since decades.

The plan for infrastructure includes spending more than $500 billion on new roads, bridges. airports. public transit. broadband. and power grid. It is seen by Biden and other congressional leaders as a complement to the larger plan.

As originally proposed, the budget legislation would lower child care costs, increase paid leave, and make it more accessible. It also increases Medicare eligibility and makes it easier to get dental, vision, and hearing coverage. The bill would make universal pre-K available, provide two years of free community college education and expand the child tax credit that Democrats created through this year’s coronavirus aid package.

The plan would include increasing tax rates on the wealthy and corporations to offset expenditures. To win Manchin’s support, the party may have to reduce parts of its plan.

Democrats may face other deadlines to revise their priorities, if they fail to pass social spending legislation. The popular expansion of the child tax credit will not be possible in 2021.

Shutdown is coming… again

Congress beat the September end deadline by a narrow margin to avoid a shutdown of government. Lawmakers didn’t have much time to act before the next deadline.

A bill signed by Biden last weekThe government will continue to be funded until Dec. Congress has approximately two months to pass and agree upon a longer-term bill of appropriations.

It is not possible to finish a funding plan on time. The coming weeks are jam-packed with activity as Democrats attempt to increase or suspend the debt limit and pass both parts of Biden’s economic plan.

It is evident that Congress will soon be able to fight over mundane matters, as shown by the Debt Limit Process.

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