Democrats try to prevent U.S. default without GOP votes
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During a news conference held at Washington’s U.S. Capitol on November 17, 2021, Chuck Schumer (D.NY), Nancy Pelosi (D.CA), and other congressional Democrats discussed the ‘Build back Better Act’ as well as climate investments.
Elizabeth Frantz | Reuters
Republicans may help Democrats lift the debt ceiling after all — in their own way.
Since months, GOP congressmen have been saying that they would not vote along with Democrats to increase the debt limit or end the risk of an unprecedented U.S. default. Some top Democrats may have found an alternative way to raise the borrowing cap prior to Dec. 15, which is the date that the Treasury won’t be able pay its bills.
It would involve a complex process and be fraught with risks. Washington will stop any default threat to global stock and economy markets if both the Senate and House succeed in this endeavor.
It would be possible to tie the effort of raising the debt limit to the bill to stop automatic Medicare spending cuts that are set for the end. A provision would be included in the health care bill to allow Senate members to vote with simple majority.
To allow Democrats to increase the borrowing limit, the plan requires at least 10 Republicans voting in favor. The Democrats would then be able to raise the debt limit in an independent vote with no GOP support, as they hold the majority of the 50-50 Senate Senate seats through Vice President Kamala Harris tiebreaking vote.
On Tuesday, the House Rules Committee will consider the Medicare bill version that contains the debt-limit language. This bill could be approved by the House in its entirety as quickly as Tuesday evening.
If the legislation is passed by both the House and Senate, President Joe Biden will sign it. Democrats are then allowed to hold separate votes in order to increase the debt limit. According to CNBC, the Democrats plan would increase the debt ceiling by $2 trillion. This is enough money to sustain the U.S. until the midterm elections in 2022.
Senate Majority Leader Chuck Schumer expressed confidence Tuesday that Congress would stave off a default — without specifying how it would do so.
He stated on the Senate floor that, “Over these past days we have made great progress on this topic and I’m optimistic we will be in a position to stop the horrible prospect of America defaulting on sovereign debt for its first time ever.”
This proposal could provide some relief for both sides. Republicans won’t be required to vote in favor of a greater debt ceiling. Democrats wouldn’t have to include borrowing limits increases in the budget reconciliation process that they use to attempt to pass $1.75 trillion of climate and social spending programs.
Democrats will have to agree on a number for the debt ceiling. Republicans may try to make this a political issue.
The debt-ceiling language was considered by congressional leaders to be added to the National Defense Authorization Act (an annual bill which sets defense spending levels) instead of the Medicare legislation. It was rejected because the NDAA vote could have proved more politically difficult both for Senate Republicans that oppose the debt limit maneuver and progressive House Democrats that are opposed to defense spending increases.
Schumer, Senate Minority Leader Mitch McConnell had discussions about ways they could avoid default. However, it’s not certain if the plans will be approved by enough GOP senators to make it a success.
R-Mo. Senator Roy Blunt told reporters that the strategy would win enough Republican support.
Hospitals at home are telling us a lot about how important it is to solve the Medicare problem. According to NBC News, he suggested that there might be a larger vote.
The debt ceiling has been a standard process over decades for both parties, and they have always supported each other. As Democrats push for their $1.75 Trillion climate and social spending package, the GOP has suggested that Democrats increase it by themselves.
The borrowing limit cannot be increased, but it does not allow for new spending. Janet Yellen, Treasury Secretary to the Treasury, has noted that Congress would need to increase the debt limit regardless of whether Democrats pass spending bills in this year’s Congress.
— CNBC’s Ylan Mui contributed to this report
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