The week ends with Congress no closer to a strategy of how to avoid the approaching fiscal cliff caused by the need to pass a funding bill by October 1 and take some action on the debt ceiling which poses the threat of a US Government default without action.

Two weeks ago Treasury Secretary Yellen warned Congress that a debt default loomed if the debt ceiling wasn’t addressed sometime in October. Because of the massive cash flows of the US Government the Secretary couldn’t give a specific drop-dead date but it is coming next month.

This week Senate Republican Leader Mitch McConnell talked to Yellen and gave several press interviews where he repeated his position that he and fellow Republicans will not support a change in the debt ceiling; that all the votes must come from Democrats who control both the Executive and Congressional branches of government. McConnell apparently wants to see the Democrats increase or suspend the debt ceiling as part of the Budget Reconciliation Bill; but at this point it doesn’t appear that Reconciliation will be passed by the October default date.

Budget Reconciliation has been moving through House Committees as the House will act first. At this point several moderate Democrats have expressed reservations about the size and scope of the bill. In fact, on a key vote dealing with prescription drugs three Democrats opposed the Party’s position. Another Democrat opposed the tax health provisions in the Ways and Means Committee. In the full House Speaker Pelosi and House Democrats can only lose three votes with their narrow four seat majority.

Problems also persist in the Senate where Senators Joe Manchin and Kyrsten Sinema continue to express opposition to the Democrats $3.5T proposal. Both were summoned to the White House to speak to the President, but their positions remained unchanged.

Speaker Pelosi announced yesterday that the House will take up a so-called Continuing Resolution (CR) next week to keep the government running through Thanksgiving; without action by October 1 will cause a government shutdown. House Democrats are still uncertain as to whether or not they will add a suspension of the debt ceiling to the CR, and what that could mean for Senate passage.

On top of the tensions over Reconciliation, CR and debt ceiling, Speaker Pelosi must decide what to do with the commitment she made to moderate Democrats to vote on the Senate approved bipartisan infrastructure bill by September 27. It has been pointed out that the 27th is a Monday and the House seldom has votes on Monday hence the 28th may be a harder date. However, progressive Democrats say they won’t vote for the infrastructure bill before Reconciliation is passed, and that is highly unlikely prior to the 27/28 deadline.

There are a lot of moving pieces and deadlines are fast approaching. The passage of the $1T infrastructure bill would be a great accomplishment for the President, it seems illogical for progressive Democrats to block its passage when some Reconciliation package will pass later this fall, though it is likely to be less than $3.5T target set by the White House and progressives.

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