House Passes Bill to Raise U.S. Borrowing Limit, Debt Dispute Delayed Until December
How do you feel about the short-term debt limit extension?
by Causes | 10.12.21
What’s the story?
- The House of Representatives on Tuesday passed a bill to raise the national debt limit by $480 billion through at least December 3rd. While the vote means lawmakers averted a potential first-ever default on the federal government’s obligations from occurring on October 18th, Congress will have to address the issue again in a few short months.
- House Democrats “deemed” the debt limit extension bill passed when they voted 219-206 on party-lines to adopt a resolution that also structures floor debate around a pair of unrelated bills that are expected to be considered next week. Using a deeming resolution allows lawmakers to avoid voting directly on individual issues included within it.
- The bill passed the Senate last week on a 50-48 party-line vote after 11 Republicans crossed the aisle to join Democrats in voting to end the filibuster on the bill. While GOP senators relented in their insistence that Democrats raise the debt limit on their own to allow the short-term debt limit hike to advance, they’ve signaled they won’t be as accommodating next time and have urged Democrats to raise the debt limit on their own through reconciliation.
What’s next for the debt limit?
- Congress chose to raise the debt limit through December 3rd in part because that date aligns with the expiration of the latest stopgap funding measure, meaning that lawmakers will need to approve appropriations for federal agencies by then or there will be a partial government shutdown.
- However, that double deadline could prove to be primarily symbolic if the Treasury Dept. is able to use “extraordinary measures” to extend the debt limit deadline, potentially into January or February 2022. Once the Treasury has determined the “x-date” at which extraordinary measures will be exhausted and the federal government will be unable to fulfill its financial obligations, Congress will know its true deadline for raising the debt limit.
- In the meantime, Democrats will continue their intra-party negotiations over the cost and scope of their “Build Back Better” reconciliation bill. If Democrats are able to pass that legislation through Congress on party-lines in addition to reaching a bipartisan deal on fiscal year 2022 appropriations by the time the true debt limit deadline, they will have a better estimate of upcoming deficits to use in raising the debt limit.
- Regardless of any progress they make on the partisan Build Back Better bill and bipartisan appropriations, Democratic majorities in the House and Senate will need to decide how they will raise the debt limit before the next deadline approaches. Absent that Republican support, Democrats will need to use budget reconciliation to raise the debt limit.
- The Senate parliamentarian has clarified that Democrats can use reconciliation for both their spending bill and the debt limit and that each can be considered independently in Congress without interfering with the other. To do so, Democrats would need to pass a resolution through both chambers to revise their budget resolution to allow them to raise the debt limit in either a standalone bill or as part of the Build Back Better package.
- A Senate “vote-a-rama” on debt-related amendments would occur when the chamber considers the revised budget resolution, giving GOP senators a chance to force painful votes. The Senate would also hold a vote-a-rama when considering the Build Back Better spending bill or legislation raising the debt limit.
- Aside from potential vote-a-rama drama, Democrats would prefer to avoid using reconciliation to raise the debt limit because they would likely have to specify an exact number for raising the debt limit, as opposed to suspending the debt limit through a future date and allowing unlimited borrowing until then. The Senate parliamentarian reportedly hasn’t provided guidance yet on whether the debt limit could be suspended using reconciliation.
— Eric Revell
(Photo Credit: iStock.com / dinadesign)
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