(Trends Wide) — The House of Representatives is expected to vote on Tuesday to extend the country’s debt limit until early December, after the Senate passed an interim measure last week in an attempt to avoid catastrophic default and economic disaster.
Once the Democratic-controlled House of Representatives approves the short-term extension, it will go to President Joe Biden for signature.
Treasury Secretary Janet Yellen has warned lawmakers that the federal government will likely run out of money by October 18, unless Congress raises the debt ceiling, setting a ticking clock. -tac and it’s up for grabs.
Congress may not even have that much time to act, as the deadline is more of an estimate than a fixed deadline. This dynamic intensifies pressure on Democrats and Republicans to reach an agreement on the debt limit.
But the temporary extension of the debt limit is only a short-term fix and sets up another possible fiscal crisis looming later this year, when it runs out.
How was an agreement reached?
After weeks of partisan deadlock, Senate Majority Leader Chuck Schumer announced last week that an agreement on the debt limit had been reached, paving the way for the Senate to vote to approve the agreement. An adviser familiar with the negotiations told Trends Wide that the agreement increases the limit by $ 480 billion. It’s the amount the Treasury Department told Congress it would need to get to December 3.
The deal’s announcement came a day after Senate Minority Leader Mitch McConnell publicly presented a debt ceiling proposal as an offer to Democrats, a move that triggered negotiations between the two parties to reach a an agreement.
House Majority Leader Steny Hoyer issued a statement following the Senate’s approval of the provisional bill stating that the House would meet Tuesday to retake and approve the measure.
Why is there still a crisis
The problem is that the dispute between the two parties on how to address the issue has not been resolved and will have to act in a few weeks to avoid the crisis again.
Republicans have insisted that Democrats must act alone to address the debt limit through a process known as budget reconciliation. Democrats have argued that the issue is a bipartisan responsibility. So far they have largely ruled out the possibility of using reconciliation. They argue that the process is too long and unwieldy and that the risk of miscalculation would be too high.
McConnell sent a letter to Biden late last week with a warning. “I am writing to inform you that I will not give you that help again if your government, fully Democratic, is headed for another avoidable crisis,” he wrote.
“I will not participate in any future efforts to mitigate the consequences of Democratic mismanagement. His lieutenants on Capitol Hill now have the time they said they lacked to address the debt ceiling through independent reconciliation, and all the tools to They can’t invent another crisis and ask me for help, “McConnell wrote.
Raising the stakes even further, lawmakers will also have to deal with the expiration of government funding in the same time frame as the debt cap after separately passing a short-term extension to avoid a shutdown that only lasts until December 3.
Trends Wide’s Kristin Wilson, Annie Grayer and Matt Egan contributed.