WASHINGTON – Democrats are hammering out details to reach an agreement on a package of President Joe Biden’s social programs while working to solve differences on how to solve the debt ceiling as the nation inches closer to default.
House progressives spoke Monday night with Biden, who told them they’d need to lower their spending bill by more than $1 trillion to appease moderates in the Senate, who say the plan’s $3.5 trillion price tag is too much, according to two sources familiar with the negotiations.
Democrats from both sides of the party and from both chambers have been working overtime for a solution, with White House negotiators meeting with Senate Majority Leader Chuck Schumer, D-N.Y., and House Speaker Nancy Pelosi, D-Calif., late into the night Monday.
On Tuesday, House moderates talked with Biden, who told them, according to a House Democratic aide familiar with the conversations, they are more aligned than what may appear.
The Senate is also poised to vote Wednesday to end debate on a piece of legislation that would suspend the debt limit to 2022. It is unlikely 10 Republican senators join all 50 Democratic-voting senators to allow the bill to come to a final vote.
The Oct. 18 deadline for when the Treasury Department says the U.S. could begin defaulting on its debts — which has never happened — is moving closer, with the options to address the issue narrowing.
Senate Minority Leader Mitch McConnell, R-Ky., said Tuesday the only way Democrats could address the issue – since Republicans are insisting they do so alone – is through a process called reconciliation, which would allow the bill to pass with only Democratic support. Democrats, including Senate Majority Leader Chuck Schumer, D-N.Y., have been resistant to use this process.
Senate Minority Leader Mitch McConnell offered Wednesday a short-term extension of the debt limit, to avoid the threat of a looming default, but it wasn’t clear whether Democrats would accept.
McConnell, R-Ky., said he would offer a short-term extension to December so long as Democrats put a precise dollar figure on the amount of the increase, in contrast to an unspecified suspension.
The country is projected to exhaust its credit limit by Dec. 18. McConnell said the extension would allow enough time for Democrats to approve longer-term legislation through a budget process called reconciliation, a strategy Democrats have rejected so far.
“This will moot Democrats’ excuses about the time crunch they created and give the united Democratic government more than enough time to pass standalone debt limit legislation through reconciliation,” McConnell said in a statement.
The Senate is scheduled to vote about 2:30 p.m. about whether to allow a vote on suspending the debt limit through Dec. 16, 2022. But that is expected to fail because Republicans oppose it.
– Bart Jansen
Six former Defense secretaries, who served under both Democratic and Republican presidents, are urging lawmakers to work together to raise the limit on how much the nation can borrow.
The letter was released hours before the Senate was scheduled to vote on ending debate on a bill to suspend the debt limit until December 2022.
Democrats need 10 Republicans to go along with the vote. Republicans have insisted that Democrats use a different procedure for addressing the debt limit that would bypass a GOP filibuster.
Not being able to pay the nation’s bills, the former secretaries wrote in a letter to congressional leaders Wednesday, would have “catastrophic consequences for the Defense Department, our military families, and our position of leadership in the world.”
If salaries to the 2.1 million members of the military are halted, they said, it’s unclear if those families would ever be repaid.
“It would be tragic to allow partisanship to now deny those critical resources essential to protecting our national security,” concluded the letter written by former Defense secretaries James Mattis, Ashton Carter, Chuck Hagel, Leon Panetta, William Cohen and William Perry.
– Maureen Groppe
Sen. Joe Manchin put to rest speculation that Senate Democrats might try to suspend the filibuster rules to pass a bill to raise the debt ceiling.
Speaking to reporters outside his office Wednesday, the West Virginia Democrat repeated his steadfast opposition to eliminating the filibuster, which requires 60 of 100 senators to pass most major legislation. Without Manchin, Senate Democrats do not have enough votes to change the rule.
“I’ve been very, very clear where I stand on the filibuster,” he said. “Nothing changes.”
Instead, Manchin implored Senate Democratic Leader Chuck Schumer, D-N.Y., and Republican Leader Mitch McConnell, R-Ky., to “please lead. Lead (and) work together.”
The Senate is expected to vote on a bill Wednesday afternoon to suspend the debt ceiling until December 2022, but it’s expected to fail because no Republicans have said they will join Democrats in overcoming the filibuster.
If the U.S. defaults on its debt for the first time, the results could lead to a global recession, Treasury officials and experts say. A tanked market would hurt 401(k)s and other investments. For example, a debt ceiling standoff in 2013 cost the economy 1% in GDP.
– Ledyard King
The head of Nasdaq, the AARP – along with banking leaders and representatives from the defense, real estate and other industries – will meet with President Joe Biden on Wednesday as the administration increases the pressure on Congress to raise the nation’s borrowing limit.
The CEO of AARP was invited to the White House meeting to emphasize that Social Security and Medicare payments would be jeopardized by what the administration is calling a “Republican-created default.”
The White House also says that even a “near-miss default” would raise interest rates on credit cards, auto and home loans.
The following business leaders are attending, either virtually or in person, to help the president make that point:
- Jane Fraser, CEO of Citi
- Greg Hayes, CEO of Raytheon Technologies
- Charlie Oppler, president of the National Association of Realtors
- Adena Friedman, president and CEO of Nasdaq
- Punit Renjen, global CEO of Deloitte LLP
- Jamie Dimon, CEO of JPMorgan Chase
- Pat Gelsinger, CEO of Intel
- Brian Moynihan, CEO of Bank of America
– Maureen Groppe
Trying to raise the pressure on Republicans, the White House Council of Economic Advisers warned Wednesday that if Congress fails to raise or suspend the limit on how much the United States can borrow to pay its debts by Oct. 18, it could take decades for the nation to fully recover from the consequences.
“In short, the United States has never intentionally defaulted on its obligations for one reason above all others: the self-inflicted economic ruin of doing so would be catastrophic,” members of the council wrote in a blog post.
In the blog post by the president’s economic advisers titled “Life After Default,” the council members lay out the basic functions of the federal government that would be at risk, including maintaining national defense and the public health system. Social Security benefits and other direct aid to families could be jeopardized.
The economic consequences of default would include a weakened dollar, fallen stocks, rising interest rates and a downgrading of the nation’s credit rating.
“These and other consequences could trigger a recession and a credit market freeze that could hurt the ability of American companies to operate,” the advisers wrote.
Just the threat of a default hurts the economy, they added, while an actual default for any amount of time would inflict a devastating blow.
– Maureen Groppe
The Senate Judiciary Committee is meeting Wednesday to examine voting rights.
The committee will discuss the John Lewis Voting Rights Advancement Act, which would aim to restore Justice Department review of changes in election law in states with a history of discrimination.
Democrats attempted to pass massive, sweeping voting rights legislation called the For the People Act that called for expanding early voting, allowing same-day registration and lowering identification requirements.
When that didn’t gain any traction with Republicans in the Senate, Democrats unveiled a new elections bill in September. That bill, while scaled down in its scope, would also establish federally mandated election rules.
Senate Majority Leader Chuck Schumer, D-N.Y., said Tuesday morning the Senate could vote on the John Lewis Voting Advancement Act “in the coming weeks.”
– Savannah Behrmann