Topline
The latest Democratic tactic aimed at quickly raising the debt ceiling was shut down by Republicans Tuesday afternoon, as the U.S. nears a potential default on its debt for the first time in history, which government officials and outside experts say would lead to economic disaster.
Senate Minority Leader Mitch McConnell (R-Ky) listens as he and the GOP leadership speak to … reporters after a weekly GOP policy meeting, at the Capitol in Washington on September 21, 2021. (AP Photo/J. Scott Applewhite)
Key Facts
Senate Majority Leader Chuck Schumer (D-N.Y.) had sought unanimous consent to change the vote threshold to raise the debt ceiling from 60 votes to a simple majority, but Minority Leader Mitch McConnell (R-Ky.) objected.
As it stands, all Democrats and 10 Republicans in the Senate would have to agree on raising the debt ceiling or run the risk of having the country default on debt payments, which Treasury Secretary Janet Yellen says would happen around October 18.
McConnell opposes raising the debt ceiling, which could pave the way to expand government spending as Democrats move forward with a $3.5 trillion budget package.
Democrats say they want bipartisan support for raising the debt ceiling, since it’s been pushed up by increased spending by both parties over the past several years.
Republicans, who suspended the debt ceiling under President Donald Trump, claim it is the Democrats’ responsibility to raise the cap since the party controls both chambers of Congress and the White House.
Crucial Quote
“There is no chance—no chance— the Republican conference will go out of our way to help Democrats conserve their time and energy so they can resume ramming through partisan socialism as fast as possible,” McConnell said.
What To Watch For
In a letter to House Speaker Nancy Pelosi (D-Calif.) on Tuesday, Yellen warned of “substantial disruptions to financial markets” if lawmakers don’t act quickly to raise the debt ceiling. The White House also said earlier this month that defaulting on debts could mean federal disaster relief efforts, infrastructure funding and Medicaid might be halted, warning that “hitting the debt ceiling could cause a recession.”
Key Background
The debt ceiling is mired in several other major issues that have Republicans and Democrats divided in Congress. The most immediate concern is funding the federal government, since there’s a Thursday deadline to avoid a federal government shutdown. Leadership in both parties say there is support to fund the government, but Republicans do not want to go forward with any plans that would also mean raising the debt ceiling. Senate Democrats attempted to pass a bill on Monday that would have funded the government and raised the debt ceiling, but Republicans killed the plan. It’s not immediately clear what Democrats’ plans are now, but one option they have could be agreeing on a standalone bill that would temporarily fund the government after October 1. They could then add raising the debt ceiling to the $3.5 trillion budget they’re trying to pass through the reconciliation process, which doesn’t require any Republican support.
Big Number
$28.4 trillion. That’s the current U.S. debt ceiling cap.
Tangent
Further complicating matters is that Democrats in the House are working to make sure they have enough support to pass a $1 trillion infrastructure package. Pelosi’s set a vote on the package for Thursday.
Further Reading
What The Debt Ceiling And Government Shutdown Really Means (Forbes)
Yellen Warns Treasury Stands To Run Out Of Cash On October 18, Causing ‘Serious Harm’ To Business (Forbes)
Everything you need to know about the debt ceiling and government shutdown showdown (Yahoo! News)
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