Key Takeaways
- Congress faces three deadlines: September 27– promised date to pass infrastructure, government shutdown October 1, and debt ceiling deadline in October.
- Infrastructure: Speaker Pelosi promised moderate House Democrats a vote on Senate passed infrastructure package by September 27 but some signs now point to a postponement of the vote.
- Government fiscal year ends on October 1 and without funding legislation, called a continuing resolution (CR), there can be a government shutdown.
- Treasury Secretary Yellen continues to warn of an October financial crisis when the US hits its debt ceiling and runs the risk of defaulting on payments and limits on new government debt.
Senate Republicans have made clear they will not support the debt ceiling relief but would likely support a CR if no extraneous provisions area added. Democrats have discussed linking CR and debt ceiling– a no go for Republicans. - Big question in DC: will Republicans filibuster debt ceiling bill, if so passage moves from 51 to 60 votes.
Reconciliation Deadline Approaching
Both the House and Senate return to DC this week with the nation facing both an unprecedented government default, and an all too common threat of a government shutdown.
However, the most immediate issue the House Democratic leadership needs to face is a commitment Speaker Pelosi made to House moderate Democrats that if they supported the Budget Resolution there would be vote on the Senate passed bipartisan infrastructure bill no later than September 27. With the 27th only a week away House Democrats have to face progressive Democrats who have demanded action on the Budget Reconciliation Bill before they will support the less expensive bipartisan infrastructure bill. It is very unlikely that action will be complete on Reconciliation next week.
The House Leadership has sent out mixed signals. On Friday, Steny Hoyer, the number two Democrat in the House, sent out a message that there would be an infrastructure vote on September 27; but over the weekend Jim Clyburn, the number three Democrat, said the vote may be pushed into October. Obviously the decision will be made by the number one House Democrat Speaker Pelosi and she is in a tough situation.
Democrats have only a four seat majority, which means they can only lose three Democrats on strict party line votes. There are nearly 100 progressives in the House and only 10 moderates who had threatened to vote against the Democratic Budget Resolution. But the bad news for the Speaker is that both 100 and 10 are more than the magic number of 3! What does she do? To postpone the September 27 date runs the risk of losing more than 3 moderates on the big vote on Reconciliation, and if most of the progressives vote against the infrastructure bill it will fail.
Senate passage of the $1T infrastructure bill with the support of 19 Republican Senators was a huge accomplishment for the bipartisanship at the core of President Biden’s philosophy. After the disaster of the final Afghan pullout and the national concern with the failure to stop Covid; President Biden and Democrats could be well served by passage of the infrastructure bill. The question now is whether the President can work with the Speaker and get progressives to support infrastructure before the Budget Reconciliation is passed. In fact the road to the Budget Reconciliation Bill looks more challenging by the day with Joe Manchin reportedly telling colleagues it may have to wait until 2022.
In addition to infrastructure, and with potentially more troubling consequences, the government faces a shutdown on October 1 without passage of a CR keeping operations going until a final budget can be approved. Plus, the obscure issue of government debt financing takes center stage as Treasury Secretary Yellen has formally told Congress at some point in October the Treasury will be unable to pay all its bills without issuing more debt. This runs the risk of the US Government defaulting on its obligations for the first time.
With Democrats in control of the Congress they need to develop a strategy to pass both the CR and an increase or suspend the debt ceiling. The House is scheduled to vote this week on both proposals; what hasn’t been decided is whether they will pass as one bill or two.
Most of the attention is on the Senate where Republican Leader McConnell has said that there will be no Republican votes on the debt ceiling resolution – Leader McConnel’s position is that Democrats control government so they need to increase the ceiling. McConnell appears to be willing to approve the CR if it is considered without the debt ceiling attached.
The big question is will McConnell allow the debt ceiling bill to pass with just 51 votes, or will Republicans mount a filibuster and require 60 votes to prevent a US Government default – a potentially disastrous result. McConnell has said he believes it is important to raise or suspend the debt ceiling but it needs to be done with only Democratic votes – and that can be done on a 51 to 50 vote. But if Republicans set the bar too high with the 61 votes needed to stop a filibuster, they may be blamed for the financial troubles that could develop with a USA default.
Decisions to watch in the coming week: will House Democrats put the CR and debt ceiling into one bill and dare the Republicans to close government and cause a default? Or do Schumer and McConnell work out a deal, separate bills, 51/50 vote and no filibuster. We will be writing about this in the coming days – big decisions – big consequences!
