US government averts partial shutdown, spending cap still looms

Washington

President Joe Biden made a quick signing to prevent a federal shutdown. The bill will keep the government funded until Dec. 3. The bill was passed by Congress earlier on Thursday.

While the Senate and House had voted back-to-back on Thursday, one crisis was avoided. However, delays continue on the other side as political parties debate how to increase the borrowing limit of the government before the United States faces a potential catastrophic default.

The House approved the short-term funding measure by a 254-175 vote not long after Senate passage in a 65-35 vote. It was opposed by a large number of Republicans from both houses. This legislation was necessary to maintain the government’s operations after the end of the current budget year at midnight on Thursday. The passage of the legislation will give lawmakers more time for crafting spending measures to fund federal agencies as well as the programs that they oversee.

“There is so much more we can do,” said Mr. Biden in a post after signing. “But the passage of this bill reminds us that bipartisan work is possible and it gives us time to pass longer-term funding to keep our government running and delivering for the American people.”

The work to keep the government open and running served as the backdrop during a chaotic day for Democrats as they struggled to get Mr. Biden’s top domestic priorities over the finish line, including a bipartisan $1 trillion infrastructure bill at risk of stalling in the House.

“It is a glimmer of hope as we go through many, many other activities,” said Senate Majority Leader Chuck Schumer, D-N.Y.

With their energy focused on Mr. Biden’s agenda, Democrats backed down from a showdown over the debt limit in the government funding bill, deciding to uncouple the borrowing ceiling at the insistence of Republicans. Treasury Secretary Janet Yellen stated that the U.S. will likely face a financial crisis as well as economic recession if it isn’t raised before Oct. 18,.

Republicans say Democrats have the votes to raise the debt limit on their own, and Republican leader Mitch McConnell of Kentucky is insisting they do so.

The short-term spending bill will provide $28.6 million in disaster aid for people who have been affected by Hurricane Ida or other natural disasters. Some $10 billion of that money will help farmers cover crop losses from drought, wildfires, and hurricanes. An additional $6.3 billion will help support the resettlement of Afghanistan evacuees from the 20-year war between the U.S. and the Taliban.

“This outcome is positive and I am happy that we have achieved it,” said Mr. Schumer. “With so many things to take care of in Washington, the last thing the American people need is for the government to grind to a halt.”

Once the government is funded, albeit temporarily, Democrats will turn their full attention to the need to raise the limit on federal borrowing, which now stands at $28.4 trillion.

The U.S. has not defaulted on any of its debts during the modern age and both political parties have historically voted for raising the limit. During Donald Trump’s tenure, Democrats joined Republican Senate Majority in raising the limit three times. The Democrats tried to address both of these priorities with one bill this time, but the Senate Republicans stopped that Monday.

The federal government can raise or suspend the debt limit to meet obligations it has already taken on. This does not allow for new spending. McConnell argued that Democrats should approve a debt extension using the same budgetary tools used to attempt to pass $3.5 trillion to increase social safety net programs, combat climate change and expand other financial aid. He reiterated that warning as the Senate opened on Thursday, even as Democrats have labeled that option a “nonstarter.”

“We’re able to fund the government today because the majority accepted reality. McConnell stated that the same will have to be done on next week’s debt limit.

House Democrats passed a separate bill Wednesday night that would have the debt limit suspended until December 2022. Although Mr. Schumer stated that he will bring the measure up to the Senate’s floor, it is likely to be blocked in the Senate by a Republican filibuster.

The arguments in each chamber about the debt limit have been based on similar themes.

“You’re more concerned with punishing Democrats than protecting our credit, and that is something Jim McGovern (D-Mass.), told Republicans. “The idea of not paying bills just because we don’t like [Mr. Biden’s] policies is the wrong way to go.”

Undaunted, Republicans argued that Democrats have chosen to ram through their political priorities on their own and thus are responsible for raising the debt limit on their own.

“So long as the Democratic majority continues to insist on spending money hand over fist, Republicans will refuse to help them lift the debt ceiling,” said Rep. Tom Cole, R-Okla.

The Treasury has taken steps to preserve cash, but once it runs out, it will be forced to rely on incoming revenue to pay its obligations. This would lead to delays in payment of Social Security beneficiaries, veterans and other government employees, as well as military personnel. Bipartisan Policy Centre, an independent think tank, predicts that the federal government will be unable to pay 40% the due payments in the weeks ahead.

This story was reported by The Associated Press.

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