Tag: debt limit
Senate Advances Bill To Raise Debt Limit And Avert Disastrous Default

Senate Advances Bill To Raise Debt Limit And Avert Disastrous Default

By Richard Cowan and David Morgan

WASHINGTON (Reuters) -The U.S. Congress' months-long drive to raise the federal government's $28.9 trillion debt limit, and avert an unprecedented default, took a step forward on Thursday as the Senate advanced the first of two bills needed for the hike.

Fourteen Republicans joined the chamber's 48 Democrats and the two independents who caucus with them in voting to end debate on the first bill, spurning right-wing demands that they boycott any measure leading to an increase in the Treasury Department's borrowing authority.

"I'm optimistic that after today's vote we will be on a glide path to avoid a catastrophic default," the chamber's top Democrat, Majority Leader Chuck Schumer, said in a speech before the 64-36 vote on a measure he negotiated with Republican counterpart Mitch McConnell to speed passage.

Treasury Secretary Janet Yellen has urged Congress to raise the limit before December 15.

Republicans for months have been maneuvering to try to force Democrats to raise the debt limit on their own, seeking to link the move to President Joe Biden's proposed $1.75 trillion "Build Back Better" domestic spending bill.

Democrats note that the legislation is needed to finance substantial debt incurred during Donald Trump's administration, when Republicans willingly jacked up Washington's credit card bill by about $7.85 trillion, partly through sweeping tax cuts and spending to fight the COVID-19 pandemic.

The Senate could vote as early as Thursday evening to pass the first of two pieces of legislation needed to raise the borrowing limit to a still-under-negotiation amount intended to cover Washington's expenses through the 2022 midterm elections that will determine control of Congress.

Democrats will need only a simple majority, including Vice President Kamala Harris' tie-breaking vote, to pass the two pieces of legislation and raise the debt limit.

A final vote, in the House of Representatives, is likely on Tuesday and President Joe Biden is expected to sign both bills into law once they pass.

'Right Thing To Do'

Republican Senator Lisa Murkowski, who is up for re-election next year, told reporters that she voted to advance the first bill because "It was the right thing to do."

She added that at a time when Russia is amassing troops on its border with Ukraine, "we don't need to be sending signals anywhere in the world that we're not going to back the full faith and credit in the United States."

The break in the legislative deadlock came just two months after Congress agreed on a short-term lift to the debt ceiling, to avert an unprecedented default by the federal government on its obligations, which would have dire implications for the world economy.

For years, lawmakers have squirmed over raising the statutory limit on the country's growing debt, fearing voter backlash.

The emergence in 2010 of the conservative, small-government "Tea Party" movement increased the rancor in Congress over such legislation, even as lawmakers voted for tax cuts and spending increases that contribute to the debt.

The Bipartisan Policy Center think thank warned last week that the government could risk default by late this month if Congress does not act.

Democrats noted that they had voted in the past to authorize debt ceiling hikes to cover Republican measures, such as the Trump tax cuts.

(Reporting by Richard Cowan, David Morgan, Susan Cornwell and Moira Warburton; Editing by Scott Malone, Peter Cooney and Andrea Ricci)

'Failure Is Not An Option': Congress Debates Biden's Historic Agenda

'Failure Is Not An Option': Congress Debates Biden's Historic Agenda

Washington (AFP) - Joe Biden faces the most important test of his presidency this week as Democrats in the US Congress launch a highwire bid to implement his sweeping economic agenda while keeping the government's lights on.

The House and Senate are moving toward votes on legislation dealing with infrastructure and social programs worth almost $5 trillion while also averting a government shutdown on Friday and a looming debt default.

Failure on any front would be catastrophic for a president looking to cement his legacy, while Democrats would see their chances diminished for hanging onto the House of Representatives and Senate in next year's midterm elections.

"You know me: I'm born optimistic. I think things are going to go well. I think we're going to get it done," an upbeat Biden told reporters at the White House.

At stake is the fate of Biden's $3.5 trillion Build Back Better social welfare package that only Democrats support, and a $1.2 trillion infrastructure bill to improve transport networks and broadband coverage that has already passed the Senate with cross-party support.

Democratic House Speaker Nancy Pelosi told colleagues that there would be a vote on infrastructure on Thursday -- the same day Congress needs to strike a funding deal to avoid a government shutdown.

'Intensity'

Progressive Democrats in the House have repeatedly threatened to tank infrastructure without a significant commitment from their moderate colleagues on Build Back Better.

But moderates nervous about freewheeling spending have said they may not vote for the bigger bill without infrastructure crossing the line first -- and have talked about scaling back the $3.5 trillion ticket price in any case.

"The next few days will be a time of intensity," Pelosi wrote to House Democrats, who have a three-vote margin in the House, plus the anticipated support of at least 10 Republicans for infrastructure.

Biden says the two bills would save the average family $15,000 a year through expanded care and education programs and reduced drug pricing, while transforming public transport, highways, bridges and broadband internet access would make life easier and greener.

The president told reporters Monday that agreement on Build Back Better may not be completed before the infrastructure vote and shutdown deadline, although he added: "I hope it's by the end of the week."

'Week from hell'

Adding to the drama, lawmakers have until midnight going into Friday to green-light a package to fund the government ahead of federal agencies running out of money.

Failure would shut down the government, which typically leads to hundreds of thousands of workers being sent home as public services are closed.

The House passed a "continuing resolution" last week to keep the government open until December 3 -- but the evenly-divided 100-member Senate rejected the package on Monday, with Democrats failing to secure the 60 votes necessary to begin debate.

Republicans are opposed to a 14-month debt ceiling hike that was included in the wording following warnings that the Treasury Department will be unable to obtain new loans sometime in October.

They say Biden's spending plans are out of control, and that the Democrats -- who control both chambers of Congress -- should avoid the disastrous looming credit default by lifting the borrowing cap on their own.

In reality, the debt limit suspension would cover spending backed by Republicans under Donald Trump, as well as other spending already authorized by the government.

Biden, who discussed the bills via phone earlier Monday with Pelosi and Senate majority leader Chuck Schumer, slammed what he called Republican "actions that show a lack of concern about our economic recovery," according to a White House statement.

The upper chamber is now likely to send a "clean" continuing resolution back to the House to pass without the debt-limit provision, averting the shutdown for two months.

That would leave the debt-limit problem unresolved, however -- a worrying outcome that will make the markets increasingly jumpy as the mid-to-late October deadline draws closer.

"You want me to be honest? It's going to be a week from hell," Rep. Debbie Dingell told CNN on Sunday.

"But failure is not an option. There is too much at stake."

McCarthy Falsely Claims Biden Plan Will 'Add $5 Trillion' To Debt

McCarthy Falsely Claims Biden Plan Will 'Add $5 Trillion' To Debt

House Minority Leader Kevin McCarthy falsely claimed on Monday that President Joe Biden's spending plan would add $5 trillion to the national debt. But he has previously acknowledged that it is funded by raising taxes on the rich and corporations.

On Fox News, the California Republican slammed the proposed Build Back Better plan — which would invest about $3.5 trillion in climate change, clean energy, health care, paid leave, child care, and free community college and pre-K — and the $550 billion bipartisan Infrastructure Investment and Jobs Act."

McCarthy charged that the bill was funded "by putting a debt onto the next generation of Americans. That's how it's paid for."

When McCarthy was asked whether any Republican would join the Democratic majority in voting to address the debt ceiling and avert a national default, he answered, "There won't be [any]. They [Democrats] want to add another $5 trillion just this week.

"Our debt as we speak today is $28 trillion. We've got about another two to sell and they want to add another five," McCarthy added.

But McCarthy is way off on these numbers.

The cost of the bipartisan infrastructure plan — which passed the Senate 69-30 in August and would invest billions in transportation, water systems, broadband, and electrical grid infrastructure — is at least partially offset by savings and additional revenue. According to a partial analysis by the nonpartisan Congressional Budget Office, more than half of it is paid for.

And Biden has repeatedly promised that the $3.5 trillion plan would be paid for by increasing taxes on corporations and those making $400,000 or more annually. "It adds zero dollars to the national debt," he tweeted on Saturday.

In an April press release denouncing "Biden's radical tax and spend agenda," McCarthy claimed Biden "plans to 'Build Back Better' by growing the government, raising taxes on American families and investments, destroying jobs, and saddling future generations with a massive debt — an agenda that will inevitably crush economic opportunity."


In May, McCarthy accused Biden of "proposing the largest tax increase in American history, including making our corporate tax rate the highest in the world."

The United States added $7.8 trillion to the national debt during former President Donald Trump's time in office — much of it with support from Republicans in Congress. In 2019, McCarthy and a bipartisan House majority opted to suspend the debt limit for the remainder of Trump's term.

The GOP's 2017 tax cut plan, which largely benefited the wealthiest Americans, increased the same budget shortfalls by severely cutting tax revenue. In 2018, the Congressional Budget Office projected that the Republican tax cuts would add roughly $1.9 trillion to the federal deficit between 2018 and 2028.

"In 2017, Republicans lowered taxes & let you keep more of your own money," McCarthy tweeted earlier this month. "Now, Democrats want to take America backward. They are going to vote to raise your taxes so they can spend more on socialist pet projects."

The proposed debt limit increase is not about paying for the new plans; it is needed to allow the government to pay for the commitments made already by this and previous Congresses and for the interest on the debt already accrued.

According to a recent report from Moody's Analytics, failure to address the debt ceiling could cost the nation's economy up to 6 million jobs, reduce household wealth by nearly $15 trillion, and increase the unemployment rate from five percent to nine percent.

A McCarthy spokesperson did not immediately respond to an inquiry for this story.

Published with permission of The American Independent Foundation.

GOP Attacks Democrats For Voting To Preserve Nation’s Credit

GOP Attacks Democrats For Voting To Preserve Nation’s Credit

Republican campaigns will harshly criticize Democratic lawmakers who vote to raise the debt ceiling in the 2022 midterm elections, the leader of the GOP's Senate campaign arm said.

"They're going to get held accountable for it," Sen. Rick Scott (R-FL), who leads the National Republican Senatorial Committee, told NBC News' Sahil Kapur in an interview on Thursday.


When asked if the debt ceiling issue will be a subject of Republican campaign ads attacking Democrats, Scott responded, "Oh, you better believe it." He added that Republicans also plan to criticize Democrats if they succeed in passing the $3.5 trillion infrastructure bill that's currently making its way through Congress.

Members of both political parties have voted to raise the debt ceiling in past years. Republicans in Congress voted to increase the debt limit three times during former President Donald Trump's tenure.

During Trump's time in office, the United States added $7.8 trillion to the national debt. The GOP's 2017 tax cuts, which largely benefited the wealthiest Americans, will add roughly $1.9 trillion to federal deficits over the next decade, according to the Congressional Budget Office.

Since President Joe Biden assumed office, however, Republicans lawmakers have started using what was once a routine procedural vote as a cudgel to hold the U.S. economy hostage for their short-term political gains.

The federal government will hit its so-called "debt ceiling" sometime in October. If Congress doesn't act to raise the debt ceiling, funding for U.S. government agencies, programs and services will lapse. Further, the Treasury Department would default on the United States' debt, sending the country into an immediate recession that could wipe out 6 million American jobs and trillions of dollars in household wealth.

Senate Minority Leader Mitch McConnell — who voted to raise the debt ceiling just two years ago — has said Republicans won't vote to continue funding the government this time around.

But when Trump was president, McConnell argued that not raising the debt ceiling would be catastrophic for the country.

"I certainly don't think any Senators are rooting for a debt limit crisis that could put our full faith and credit at risk," McConnell said in 2019. "That means every one of our colleagues should actually vote for it."

McConnell is now going so far as to block the debt ceiling bill from an up-or-down vote and has vowed to filibuster the vote. He also wants Democrats to use a more complicated Senate procedure called budget reconciliation to raise the borrowing limit just with Democratic votes.

This decision has little to do with actual governance, and everything to do with scoring political points against Democrats — no matter the cost to Americans. Scott himself said this will be the GOP's playbook ahead of 2022: to hammer Democrats in ads for increasing the debt.

Still, it's unclear how effective Scott's strategy will be.

Polls have shown that 52 percent of Americans support Democrats' wide-ranging spending plan, which would make child care more affordable; give American workers 12 weeks of paid parental leave; lower the eligibility age for Medicare recipients; and add dental, vision, and hearing benefits to existing Medicare plans.

The debt limit, by contrast, is not a top concern among American voters.

An Axios/Ipsos poll from August found that "government budget and debt" ranked sixth among the most important issues for voters, behind the COVID-19 pandemic, political extremism, climate change, crime, and health care.

And a Gallup poll from August found just two percent of Americans saying that the "federal budget deficit/federal debt" is the "most important problem facing the country today."

Published with permission of The American Independent Foundation.