The House of Representatives approved legislation to raise the U.S. debt limit on Tuesday. The final legislative hurdle to avert a first-ever national debt default that would occur next week without its passage.
The bill, passed by the Senate last week, now will go to President Joe Biden’s desk for his signature and enactment. He is expected to sign it this week, and maybe as soon as Wednesday.
The legislation, which cleared the House with a party-line vote of 219-206, was a result of an agreement between congressional Democrats and Senate Minority Leader Mitch McConnell (R-KY), and would extend the debt ceiling by $480 billion. This will allow the current national debt to be raised from $28.4 trillion to almost $29 trillion.
Debt ceiling suspensions or extensions do not authorize new government spending, but allow the Treasury Department to pay for appropriations Congress has already approved. This particular debt ceiling extension is probably good for less than three months, and the issue will be at hand again.
Raymond James policy analyst Ed Mills explained Tuesday morning that McConnell designed the $480 billion plan to force Congress into addressing the debt limit again before the legislature breaks for the holidays.
“This is structured in a way that the debt limit needs to be dealt with in December to the greatest extent possible,” Mills said when reached by phone. “Is it later in December? Is it early January? It’s semantics at that point,” Mills continued. “When Congress is done in December, they’re going to want to go home and not come back to a ticking time bomb of an issue.”
McConnell’s and Republican’s plans are that they will force a longer-lasting borrowing limit increase through budget reconciliation. Reconciliation would allow Democrats to pass a debt limit hike with a simple majority vote and circumvent a GOP filibuster.
If McConnell sticks to his threat to withhold Republican support, Democrats will be left with few options other than reconciliation because the Senate is split 50-50. And several Republicans believe the short-term deal will bind Democrats to a debt ceiling increase in December.
Several Democrats think that McConnell will cave again, but he has already told President Joe Biden in a scathing letter on Friday, “I will not be a party to any future effort to mitigate the consequences of Democratic mismanagement. Your lieutenants on Capitol Hill now have the time they claimed they lacked to address the debt ceiling.”
This Democrat win on raising the debt ceiling buys them 2 plus months to sort out their intraparty disagreements over their multitrillion-dollar health, education and climate package and pass a parallel infrastructure bill in the House.
McConnell claimed last week that in extending his compromise, that by December, Biden , Schumer and Pelosi, will be unable to claim they lacked enough time to manage both the debt limit and their policy agenda.