Will the House bill to suspend the debt limit get approval from the Senate?
Democrats in Congress are attempting to pass a temporary suspension of the national debt ceiling to prevent a federal government shutdown next month.
On Tuesday the House of Representative passed legislation that Democrats hope will prevent a government shutdown and avoid impending economic calamity by temporarily suspending the United States’ debt ceiling.
The vote was passed in a 220-211 party line vote, with all Democrats in favour and all Republicans voting against. However the bill must now clear the Senate and, with GOP members threatening to block the proposal, President Biden faces the prospect of a federal funding lapse.
The bill will provide funding for the federal government through 3 December and suspend the national borrowing limit until the end of 2022. If this legislation, or something similar, is not passed by 30 September Treasury Secretary Janet Yellen has warned congressional leaders that the US will be unable to pay outstanding bills at some point in October.
220-211, House passes bill to avert government shutdown and suspend debt limit, along with disaster aid and money for Afghanistan evacuation effort. But the Senate GOP plans to block it over its inclusion of a debt ceiling hike — and there’s no clear resolution yet— Manu Raju (@mkraju) September 22, 2021
Republicans resistant to increased spending
The big challenge facing the proposal comes in the Senate where GOP Leader Mitch McConnell has insisted that Republicans will not support anything that calls for the debt limit to be increased. Democrats have argued that the Republican Party were responsible for driving up the national debt by supporting the Trump Administration’s tax cuts in 2017, but McConnell has reiterated that he believes it is the Democrats’ problem to solve.
"We do not have divided government. Democrats do not need our help," Senate Minority Leader McConnell said in a statement. "They have every tool to address the debt limit on their own: the same party-line process they used to ram through inflationary spending in March and already plan to use again this fall."
However Senate Majority Leader Chuck Schumer has criticised the GOP for this stance and warns of the economic damage that failing to raise the debt ceiling could bring, with a first ever US default not off the table.
On Tuesday Schumer said: “This is playing with fire. Playing games with the debt ceiling is playing with fire and putting it on the back of the American people.”
Schumer if Congress doesn't raise debt limit: It could stop payments to Social Security recipients...payments to veterans. It could raise interest rates, making a mortgage, a car loan more expensive..this is playing with fire.— Chad Pergram (@ChadPergram) September 21, 2021
What is the debt ceiling?
The federal debt ceiling is the maximum amount of borrowing that the US government can use to fund their agenda, and it is calculated as a rolling total from one administration to the next. The legal limit on debt does not affect consumers, but it could prevent the government from funding vital social programmes if a solution is not found before the end of September.
Yellen has warned of the potential repercussions: “Nearly 50 million seniors could stop receiving Social Security checks for a time. Troops could go unpaid. Millions of families who rely on the monthly Child Tax Credit could see delays.”
Currently the maximum borrowing capacity is $28.4 trillion and any increase or suspension to the debt ceiling would have to be approved by both Houses of Congress before being signed into law by Biden.
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