Democrats aim to suspend debt limit with bill to avoid government shutdown
House Democrats will combine a short-term government spending bill with a suspension of the debt limit, a package slated to hit the floor this week, Speaker Nancy Pelosi (D-Calif.) announced Monday.
The move comes after weeks of debate over the best way to hike the government’s borrowing limit and prevent a default in the face of opposition from Senate Republicans, who are threatening to oppose the measure to protest President Biden’s spending plans.
By combining the debt limit increase with the continuing resolution, which will extend government funding into December, Pelosi is daring Senate Minority Leader Mitch McConnell (R-Ky.) to sink the package and risk a government shutdown on Oct. 1.
In a joint statement with Senate Majority Leader Charles Schumer (D-N.Y.), Pelosi said they will suspend the debt limit until the end of 2022. That timeline, the leaders said, reflects the $908 billion COVID-19 relief package approved by both parties in December, when former President Trump was still in office.
“The American people expect our Republican colleagues to live up to their responsibilities and make good on the debts they proudly helped incur in the December 2020 ‘908’ COVID package that helped American families and small businesses reeling from the COVID crisis,” Pelosi and Schumer said.
McConnell, however, has been adamant that Republicans will not help Democrats increase the debt limit, citing the fact that Democrats control both chambers of Congress and the White House.
“The country must never default. The debt ceiling will need to be raised,” McConnell said this month in an interview with Punchbowl News. “But who does that depends on who the American people elect.”
That position of opposing a policy he says he supports runs counter to the Democrats’ strategy when they were the minority party under Trump and helped raise the debt limit on several occasions.
Still, McConnell has given no indication that he intends to change his mind, raising the prospect of a government shutdown. The high-stakes game of chicken is already prompting a fierce round of finger-pointing, each party blaming the other for the impasse.
Amid the debate, Democrats are emphasizing that raising the debt limit does not authorize or allocate new federal spending but simply allows the Treasury Department to borrow additional funds to cover expenditures already approved by Congress.
“Addressing the debt limit is about meeting obligations the government has already made, like the bipartisan emergency COVID relief legislation from December as well as vital payments to Social Security recipients and our veterans,” Pelosi and Schumer said in their statement.
Adding to the urgency, Treasury Secretary Janet Yellen has said that, under current conditions, the department will reach its borrowing limit at some unspecified time in October.
In a Wall Street Journal op-ed published over the weekend, Yellen warned that a government default would prove to be a devastating — and irreparable — blow to the U.S. economy.
“We would emerge from this crisis a permanently weaker nation,” she wrote.
Updated at 3:36 p.m.