Key Takeaways
- Congress passed debt ceiling increase, new “drop dead” date on default hard to estimate.
- Biden agenda continues to be stymied by disagreements between Democrats: progressives vs moderates. Pelosi needs to work out a deal with Senate as she doesn’t want swing district members to vote on programs that die in the Senate.
- Can Speaker deliver on new October 31 target date for $1T bipartisan infrastructure bill?
- New government shutdown date of December 3 looms as Congress seeks to pass spending bills.
Debt Ceiling Updates
Last week the House returned for a one day session to pass the $480B increase in the debt ceiling. The Treasury Department has estimated that the new ceiling should carry the government until early December. However, those who follow government cash flows aren’t sure what the exact day may be before the US faces another default crisis. Calculating the cash flows of the US Government has always been difficult but the pandemic has added new levels of uncertainty, everything from the delayed supply chain to changing consumer trends have been impacted. There are Washington firms that make predictions on government cash flows and I have seen dates on when the government may run out of money that range from December 3 to early January.
This week both the House and Senate return facing sharp Democratic divisions on the Biden agenda, and the Senate grappling with a backlog of nominations delayed due to filibustering by Republicans led by Senator Ted Cruz.
Infrastructure Bill: Decisions and Implications
In the House Democrats need to find a pathway to pass both the Senate approved bipartisan infrastructure bill, and the Build Back Better (BBB) Biden Administration social agenda under the Budget Reconciliation process. Speaker Pelosi has a difficult needle to thread to unite the nearly 100 members of the progressive caucus and the much smaller block of moderate Democrats. Her dilemma is that with a small four vote majority she needs to protect Members from Republican leaning districts. Seven Democrats won seats that voted for Trump in the Presidential race. Others represent districts that were Republican prior to the large Democratic wins in 2018.
In the Senate Mitch McConnell is the master of protecting swing state Republican Senators, and now the Speaker needs to take a page from the McConnell playbook. She doesn’t want to have moderate Democrats in competitive seats vote for provisions on climate, Medicare, or benefits that may be hard to sell back home, only to see the provisions die in the Senate where Manchin and Sinema are holding out against some of the more expensive and controversial items. The Speaker needs to have confidence that the House bill will pass the Senate with the support of all 50 Democratic Senators.
The Speaker also needs to deal with the broken promise she gave to moderate Democrats that there would be a vote on the bipartisan $1T infrastructure bill by September 27. She has now indicated a new target date for a vote on infrastructure of October 31, but again progressives have threatened to block passage.
Moderate Democrats have been telling their colleagues that the Party needs a victory and the White House is getting impatient with the House and wants passage of the $1T bipartisan infrastructure bill. Not only is it the biggest infrastructure bill in a generation; but it is truly bipartisan getting 19 Republicans Senators to support passage. At this point it is not clear if the President has the ability to force a House vote and overcome progressive opposition. Senator Bernie Sanders isn’t helping by encouraging the House progressives to continue to block the bill in order to get the largest number possible in the BBB Budget Reconciliation bill. Senator Sanders continues to make the point that he wanted a $6T BBB bill and that $3.5T already represents compromise by progressive; hence he is expressing dismay with talk of a $2T bill.
While the news is focused on the divide between Democrats and the passage of infrastructure and the BBB Budget Reconciliation Bill the Democratic leadership needs to make sure that there is not a government shutdown on December 3 when the current Continuing Resolution (CR) expires. Last month Republicans were willing to support a Continuing Resolution (CR) that funds the government at current levels; it is not clear if they will support a CR again after Thanksgiving. Both parties face tough choices. Republicans know from past polling that voters tend to blame them when they vote against keeping the government open; but Democrats control both the legislative and executive branches of government and putting blame on Republicans may be tough.
A lot of work for Congress to cover between now and carving the Thanksgiving turkey.
