Congress poised to avert shutdown, but brawl looms on debt

Congress is moving to avert a government shutdown before Friday, leaving Democrats with a tough choice on how to raise the debt ceiling.

Both the House and Senate appear poised to pass a short-term funding bill on Thursday that will take one issue off of Congress’s full plate of legislation facing deadlines.

Though the Senate spent much of Wednesday haggling behind the scenes over the government funding bill — amid a push by Republicans for votes related to adding money for Israel’s Iron Dome defense system and changing a provision on Afghan refugees — senators and aides downplayed the chance that any last-minute drama would derail the continuing resolution that’s expected to fund the government through Dec. 3.

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Senators expect the continuing resolution to get a vote on Thursday and quickly be sent to the House to be approved before the midnight deadline.

“Things look pretty good right now,” said Sen. Richard ShelbyRichard Craig ShelbyRepublicans struggle to save funding for Trump's border wall On The Money — Biden sticks with Powell despite pressure Trump seeking to oust Republican Alabama governor over canceled rally: report MORE (Ala.), the top Republican on the Senate Appropriations Committee.

Senate Majority Leader Charles SchumerChuck SchumerDemocratic frustration growing over stagnating voting rights bills Schumer mourns death of 'amazing' father Feehery: The honest contrarian MORE (D-N.Y.) told reporters that the funding bill is in “very good shape” to be passed before the clock strikes midnight.

But the bill’s passage will also close the door on how Democrats had hoped to raise the debt ceiling.

“There’s no backup plan. The economy collapses,” said Sen. Chris MurphyChristopher (Chris) Scott MurphyRepublicans struggle to save funding for Trump's border wall Senate Democrats call on Biden to push for COVID-19 vaccine patent waivers at WTO Israel signals confidence in its relationship with Biden MORE (D-Conn.), asked how the debt ceiling is resolved outside of a must-pass government funding bill.

Senate Finance Committee Chairman Ron WydenRonald (Ron) Lee WydenLobbyists turn to infrastructure law's implementation Democrats plow ahead as Manchin yo-yos Overnight Energy & Environment — House passes giant climate, social policy bill MORE (D-Ore.) added, “Democrats are going to address this issue. ... It would be nice to have some Republican help.”

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The House initially passed a bill last week that would have funded the government through Dec. 3 and suspended the debt ceiling through 2022.

But Senate Republicans blocked that bill on Monday from getting the 60 votes needed to move forward. Senate Minority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellFive issues that will define the months until the midterms  Key senators to watch on Democrats' social spending bill Republicans seem set to win the midterms — unless they defeat themselves MORE (R-Ky.) also blocked a request from Schumer to bypass the legislative filibuster on a stand-alone bill to suspend the debt ceiling, something Democrats let Republicans do to raise the debt ceiling during the George W. Bush era.

House Democrats also passed a bill on Wednesday to raise the debt ceiling, but that’s expected to hit a similar Senate GOP buzzsaw. Though a band of House moderates had signaled unease over taking a vote that was guaranteed to go nowhere in the Senate, Speaker Nancy PelosiNancy PelosiNews media's sausage-making obsession helps no one Klobuchar confident spending bill will be finished before Christmas Five reasons for Biden, GOP to be thankful this season MORE (D-Calif.) leaned on members during a closed-door meeting and publicly urged them to not be guided by Senate Republicans’ stance.

“We cannot and will not allow Republicans’ extremism and utter lack of concern for families to drive our economy into the ground,” Pelosi said.

Republicans have signaled for months that they won’t help raise the debt ceiling as they push for Democrats to take care of it themselves under reconciliation, an arcane budget process they are using to try to bypass a GOP filibuster on their sweeping spending bill.

McConnell’s position has left Democrats fuming, particularly since they helped Republicans suspend the debt ceiling during the Trump administration.

“It’s unreal to me that Republicans are somehow getting away with telling Democrats we should do this ourselves and then not letting us do it ourselves. It is absolutely bonkers,” Murphy said.

Schumer warned that a default could be caused by “Republican stupidity.”

Congress has until Oct. 18 to raise or suspend the nation’s borrowing limit, Treasury Secretary Janet YellenJanet Louise YellenBlowing up the Death Star would cause an economic crisis (and other reasons employers shouldn't pay off workers' college debt) Buttigieg has high name recognition, favorability rating in Biden Cabinet: survey Biden's spending binge makes Americans poorer, just before the holidays MORE warned in a letter this week. Though the country has never defaulted, even struggling to raise the debt ceiling in 2011 resulted in S&P stripping the United States of its longtime AAA credit rating.

A default could cost millions of job losses and wipe out trillions in household wealth, according to a recent report from Moody’s Analytics.

Republicans appear confident that the U.S. government ultimately won’t default.

“It will get raised in part because they know that the president cannot afford another disaster,” said Sen. Mitt RomneyWillard (Mitt) Mitt RomneyGOP holds on Biden nominees set back gains for women in top positions This Thanksgiving, skip the political food fights and talk UFOs instead China draws scrutiny over case of tennis star Peng Shuai MORE (R-Utah).

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But they are showing no movement toward helping Democrats or letting a stand-alone bill on the debt ceiling pass the Senate without a filibuster.

“I wouldn’t go out there on a limb because he’s going to have to walk it back,” Sen. John ThuneJohn Randolph ThuneParnell exit threatens to hurt Trump's political clout Schumer-McConnell dial down the debt ceiling drama McConnell, Schumer hunt for debt ceiling off-ramp MORE (S.D.), the No. 2 Senate Republican, about Schumer’s resistance to using the budget reconciliation process to resolve the debt standoff.

“I think in the end that’s the path they’re going to have to go down. I know he’s resisting it,” Thune added. 

If Republicans won’t help, Democrats will need to figure out a way in potentially a matter of weeks to raise or suspend the debt ceiling on their own. Republicans want them to do it under reconciliation, which would require them to specify a new number for the nation’s borrowing limit.

Pelosi indicated Wednesday night that the reconciliation route isn’t an option, and Schumer has been adamant that it’s not on the table.

“Now in solving this crisis, this body cannot and will not go through a drawn-out unpredictable process sought by the minority leader. ... To do this through reconciliation requires ping-ponging separate bills back from the Senate and the House,” Schumer said.

But there’s no guarantee that Democrats could line up the sweeping spending bill they are trying to use the budget process for in time to insert the debt ceiling amid high-profile Democratic infighting. Democrats are also worried reopening the budget process would be too lengthy, and procedurally murky, to bank on for something as significant as the debt ceiling given the Oct. 18 deadline.

“If we had put raising the debt ceiling in the reconciliation instruction, we could do that. Having not put in, I think it’s very difficult to go back. ... You have to take it through another floor process with a vote-a-rama,” said Sen. Tim KaineTimothy (Tim) Michael KaineDemocrats plow ahead as Manchin yo-yos Senate advances defense bill after delay Overnight Defense & National Security — Presented by Boeing — Senators to take up defense bill Wednesday MORE (D-Va.).