Congress Juggles Agenda to Avert Government Shutdown and Default

While some of the worst-case scenarios — a government shutdown, a federal default or the complete collapse of Biden’s economic plan — are unlikely, several obstacles stand in the way as leaders manage intertwining negotiations and competing political agendas. 

Democrats, who have slim majorities in both the House and Senate, are trying to balance normal legislative work — funding the federal government and managing the national debt — while simultaneously finalizing two separate bills that contain much of Biden’s economic vision. 

They are sparring with Republicans over the debt while facing divisions within their own party about how much to spend on new social programs and what taxes to raise to pay for them. 

Here’s a rundown of the ongoing battles in Congress.

Government Funding
Both parties largely agree on a short-term extension of federal funding through Dec. 3, but Democrats have attached the debt-ceiling suspension to that must-pass measure and Republicans say they won’t vote for it because they don’t approve of Democrats’ plans to spend trillions more on social programs. 

Current government funding runs out Sept. 30, so lawmakers must reach a deal by then to avert a shutdown. The likely scenario is that lawmakers strip out the debt ceiling language from the funding bill and find another way to address the debt. It’s also possible that they could pass a one- or two-week stopgap funding measure to continue negotiating with Republicans. 

“Whatever it is, we will have a CR that passes both houses by Sept. 30,” House Speaker Nancy Pelosi said Thursday, referring to a continuing resolution, the legislative name for a short-term spending bill.

Debt Ceiling
Democrats say that Republicans should vote to raise the debt limit because it has traditionally been a bipartisan exercise and government debt includes money spent under President Donald Trump. Republicans say Democrats can and should use a fast-track budget process to avoid the Senate’s typical 60-vote threshold and allow them to pass the bill Democrats-only in the evenly divided chamber. 

Senate Majority Leader Chuck Schumer says Republicans are to blame if the U.S. Treasury defaults on its obligations, an unlikely but economically catastrophic possibility if lawmakers don’t increase the government’s borrowing ability by sometime in mid-to-late October.

Democrats are coming to the realization that they will likely have to use the filibuster-proof budget reconciliation process to suspend the debt ceiling on their own in the next several weeks. 

“If they’re not going to be responsible, we still will be,” Senator Tim Kaine, a Virginia Democrat, said. 

A less likely — but far more risky — possibility is that Democrats hold firm and wait for financial markets to fall and hope that puts pressure on at least 10 Republicans to join them to pass a debt limit bill. 

Infrastructure Bill
The $550 billion bipartisan plan to pump new money into transportation and energy facilities is a key priority for many moderate Democrats, particularly those who represent swing districts and states. The Senate has already passed the politically popular bill, but Pelosi, at the urging of progressives, has delayed a House vote to give lawmakers time to work on the rest of Biden’s tax and spending plans.

Last month, Pelosi pledged she would allow a vote on the infrastructure bill on Sept. 27. But progressives are threatening to sink the bill because the $3.5 trillion package funding many of their priorities through a series of tax increases isn’t yet ready for a vote.

The House Budget Committee and a group of moderates are both planning work over the weekend to advance the reconciliation bill, but Democrats probably won’t be able to line up that larger package for a Monday vote. 

That means Pelosi has a stark choice: anger moderates by delaying the vote on the infrastructure bill or risk an embarrassing defeat on the House floor. 

$3.5 Trillion Tax and Spending Plan
The reconciliation bill — which contains the bulk of Biden’s agenda — still faces several hurdles in Congress as Democrats debate the details, including the topline number. 

The budget agreement they are using to advance the legislation gives them up to $3.5 trillion, but moderates including Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have said they won’t vote for a bill that big. If they don’t budge — and they’ve given no indication they will — Democrats will have to settle for something less.

A smaller reconciliation package would force tough calls about their own priorities. That’s likely to be contentious as Democrats fight to include their favored provisions in what could be the last large bill to pass before the mid-term elections. 

The legislation currently calls for trillions for renewable energy investment, tax credits for families, free college and an expansion of Medicare benefits, offset by tax increases on corporations and households making more than $400,000. 

Pelosi and Schumer said Thursday they had a “framework” of tax options to pay for the expanding social programs, but those ideas haven’t been vetted by the caucus. Finalizing the details could take weeks — if not months — for Democrats to resolve.