Debt crisis averted, but at what cost?

With Tuesday’s 219-206 vote along party lines to increase the U.S. debt limit by $480 billion, House Democrats averted a possible global financial meltdown. However, Congress and the nation’s problems are far from solved.

The increase won’t cover bills until December 31, which also marks the deadline for an temporary extension government funding. At the same time, Democrats missed their own deadlines for passing a $1.2 trillion bipartisan infrastructure package that cleared the Senate, and for working out differences between moderates and progressives over the 2022 budget, which includes many of President Joe Biden’s top domestic policy agenda items.

Why We Created This

After focusing on the debt, Democrats face an important stretch with President Biden’s domestic agenda at stake. These weeks have revealed real divisions between the parties.

That has deflated the momentum Mr. Biden had in August, when he held up the Senate’s 69-30 passage of the infrastructure bill as proof he could still broker bipartisan deals in a narrowly divided Congress, promising progressives that Part 2 – with priorities like health care and social programs – would be coming shortly. The Democrats are facing a greater challenge than ever because of the tension and high pressure wrangling that has damaged trust within the parties.

” I think both sides now understand that their priorities and fates are intertwined,” states John Yarmuth, Democratic Representative.

WASHINGTON

With Tuesday’s 219-206 vote along party lines to increase the U.S. debt limit by $480 billion, House Democrats averted a possible global financial meltdown just one week before Treasury Secretary Janet Yellen had warned that the United States would run out of funds and default. However, Congress and the nation’s problems are far from solved.

The increase will only cover the bills through early December, which is also the end date for a temporary extension of government funding that passed the Senate Sept. 30 with support from more than a dozen Republicans.

At the same time, Democrats missed their own deadlines for passing a $1.2 trillion bipartisan infrastructure package that cleared the Senate in August, and for working out differences between moderates and progressives over the 2022 budget, a $3.5 trillion version of which includes many of President Joe Biden’s top domestic policy agenda items.

Why This

Was Written

After focusing on the debt, Democrats face an important stretch with President Biden’s domestic agenda at stake. These weeks have revealed real divisions between the parties.

That has deflated the momentum Mr. Biden had in August, when he held up the Senate’s 69-30 passage of the infrastructure bill as proof he could still broker bipartisan deals in a narrowly divided Congress, promising progressives that Part 2 – focused on “soft” infrastructure like health care, social programs, and family benefits – would be coming shortly. Democrats will face greater challenges as they try to achieve all three priorities. This is partly because high-pressure negotiations have damaged trust between the parties and inside them.

In a pointed speech from the Senate floor on Oct. 7, just before the Senate passed the temporary debt-limit increase, Majority Leader Chuck Schumer blamed Republicans for “playing a dangerous and risky partisan game,” and manufacturing a crisis. In an angry letter, Senator Mitch McConnell responded that Schumer “poisoned even more” and Democrats shouldn’t look to Republicans for help. The drama surrounding the other two key bills has also brought out the attention of Democrats’ internal conflicts.

In a sign of progressives’ growing influence, Speaker of the House Nancy Pelosi broke her promise to moderates and postponed a Sept. 30 vote on the infrastructure package. Without a promise from moderates, progressives refused to vote for the bill. They also rejected the “Build Back better” bill that includes climate and family measures.

New Jersey Rep. Josh Gottheimer, who leads the bipartisan Problem Solvers caucus and has advocated strongly for the infrastructure package, called Speaker Pelosi’s decision “deeply regrettable” and accused the 96-member Congressional Progressive Caucus of using tactics similar to those of the GOP’s Freedom Caucus.

Democratic Sen. Joe Manchin of West Virginia talks to reporters at the U.S. Capitol in Washington, Oct. 7, 2021. To limit the cost and extent of President Obama’s “Build back Better” bill, Senator Manchin is negotiating with the White House and party leaders.

Biden’s visit to Congress

A key question now is whether the Democrats are ready to work through their differences, or if the internal feuding – with members publicly disparaging aspects of both bills – has already undercut their ability to claim a significant victory for the president.

Rep. John Yarmuth (Democratic chairman of the House Budget Committee) recently said that he will not be running for reelection in next year’s election. However, Mr. Biden’s recent trip to Capitol gave Democrats hope and a way forward.

” “I think both sides now fully understand that their priorities are intertwined.” “I think both sides now fully understand that the fates of their priorities are intertwined.”

Many interpreted the president’s message as signaling to moderates that he was not going to push for the infrastructure bill to be passed until they agreed to support his budget priorities.

Democrats plan to pass the Build Back Better Act through a process known as budget reconciliation, which allows them to circumvent the usual 60-vote threshold for legislation in the Senate and pass it with a simple majority. But that means they need all 50 Democratic senators on board, along with Vice President Kamala Harris as the tie-breaking vote. The key standouts are the Democratic Senators. The key holdouts are the Democratic Sens. Kyrsten Sinema and Joe Manchin from West Virginia, as well as Kyrsten Silenza of Arizona. Both have resisted the $3.5 trillion price tag proposed by Senator Bernie Sanders (the Budget Committee Chairman), who has presented a method to finance that spending while not increasing the deficit. Senator Manchin, who called it “fiscal insanity” to spend trillions on new and expanded government programs, has said he would like to see the budget come down to $1.5 trillion. Although Senator Sinema’s demands are still a mystery to Congress, she claims she has clearly communicated her position to the White House.

Democratic officials are currently discussing a bill in the $1.9 trillion-$2.2 trillion range and are trying to negotiate cuts to their original framework. This includes initiatives such as expanded health care benefits, paid family leave, free community college, and climate change policies. There are two options: reduce the number of programs or make them shorter. Another option is to use “means testing” so that benefits go only to the most in need.

Speaker Pelosi indicated Monday evening in a letter to “Dear Colleague”, that there is more support for the second option. She wrote, “Overwhelmingly,” that the advice she is receiving from members was to focus on doing fewer things better. On Tuesday she said to reporters that she was actually in favor of keeping the majority of the measures and reducing the timeframe.

Debt Limit Crisis, Part 2 After weeks of playing political chicken about the debt limit limit, Senator McConnell shocked many of his fellow caucus members by granting a temporary extension and pulling out at the very last moment. Texas Sen. Ted Cruz accused the minority leader of a “strategic mistake,” and demanded a recorded vote to end the GOP filibuster, forcing Senator McConnell to find at least 10 Republicans to join with Democrats to end the blockade. But Senator McConnell made it clear that Democrats would have to increase the debt limit by themselves in December. This means they might have to resort to the complicated reconciliation process. Majority Leader Schumer refused reconciliation during the standoff, and has maintained that reconciliation is not possible in his public statements.

Some Democrats want their party to quickly forget the matter and take their lumps.

” I expect Senator Schumer not to lead us to the edge,” states Stephanie Murphy (Democratic Representative from Florida). She calls the GOP’s position “terribly disappointing” but says Democrats can not expect Republicans to intervene at the very last moment. She adds that there should be a plan for addressing the debt ceiling. It is not possible to play games with all the faith and credit of U.S. government