Democrats tie government funding to debt bill, GOP digs in

Democratic congressional leaders backed by the White House say they will push ahead with a vote to fund the government and suspend the debt limit, all but daring Republicans who say they will vote against it despite the risk of a fiscal crisis.

Congress is rushing headlong into an all-too-familiar stalemate: The federal government faces a shutdown if funding stops at the end of the fiscal year, Sept. 30. At the same time, the U.S. risks defaulting on its accumulated debt load if the borrowing limits are not waived or adjusted.

All this while Democratic lawmakers are laboring to shoulder President Joe Biden’s massive $3.5 trillion “build back better” agenda through the House and Senate with stark opposition from Republicans.

“The American people expect our Republican colleagues to live up to their responsibilities and make good on the debts they proudly helped incur,” House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer in a joint statement Monday.

From the White House, the president backed the congressional leaders’ plan to hold the votes.

“This is a bipartisan responsibility, just as it was under my predecessor,” Biden said in a tweet. “Blocking it would be inexcusable.”

The magnitude of the challenges ahead and the speed required to accomplish the job are like nothing Congress has faced in recent memory, situating Biden’s entire domestic agenda and the political fate of his Democratic party at a crucial moment.

As Democrats charge ahead, the Republicans as the minority party in Congress hoping to regain control in the next election in 2022 plan to sit back, watching and waiting to see if Biden and his allies can succeed against the odds — or spectacularly fail.

Senate Republican leader Mitch McConnell said he’s not about to help pay off past debts when Biden is about to pile on more with a “reckless” tax and spending package.

“Since Democrats decided to go it alone, they will not get Senate Republicans’ help with raising the debt limit. I’ve explained this clearly and consistently for over two months,” McConnell said Monday on the Senate floor.

The vote this week on funding to keep the government running past Sept. 30 and allow more borrowing will force the political stalemate into the open.

The Treasury Department warned that it will soon run out of cash-on-hand, and have to rely on incoming receipts to pay its obligations, now at $28.4 trillion. That could force the Treasury to delay or miss payments, a devastating situation.

“Doing so would likely precipitate a historic financial crisis,” wrote Treasury Secretary Janet Yellen in the Wall Street Journal.

Stocks on Wall Street closed sharply lower Monday, handing the S&P 500 index its biggest drop in four months as worries about heavily indebted Chinese real estate developers rippled across markets and investors have concerns that the U.S. Federal Reserve could signal that it’s planning to pull back some of the support measures it’s been giving markets and the economy.

Once a routine matter, lifting the debt ceiling has become a political weapon of choice for Republicans in Washington ever since the 2011 arrival of tea party lawmakers who refused to allow it. At the time, they argued against more spending and the standoff triggered a fiscal crisis.

Echoing that strategy, McConnell is refusing to provide Republican votes, even though some GOP senators might have a tough time voting no.

The package is expected to keep most spending at its current levels on a stopgap basis through the end of the year and include supplemental funds for the aftermath of Hurricane Ida and other natural disasters, as well as money to help defray the evacuations from Afghanistan. Tacking on legislative language to allow more borrowing would cover the nation’s debt payments through 2022.

Republican Sen. John Kennedy of Louisiana, whose state was battered by the hurricane and who is up for election next year, said he will likely vote for it if “the disaster relief portion is acceptable.” He added, “Because my people desperately need the help.”

When McConnell was in control of the Senate he relied on Democratic votes to help raise the debt ceiling during the past administration and the Democrats said they expect the same from him now. It typically takes 60 votes to advance bills in what's now a divided 50-50 Senate, meaning at least 10 GOP senators would be needed.

By withholding votes, Schumer said, “what Republicans are doing is nothing short of a dine-and-dash of historic proportions.”

Meanwhile, behind the scenes, Democrats are negotiating among themselves over Biden's big $3.5 trillion package as the price tag likely slips to win over skeptical centrist lawmakers who view it as too much.

The size and scope of Biden's “Build Back Better” initiative cannot be overstated. It touches almost all aspects of Americans' lives.

Biden's plan aims to not just rebuild the country after the COVID-19 crisis and economic fallout, but begin to change longstanding federal spending patterns in ways that provide more services to more Americans, and attempt to level the growing income inequality that permeates the economy.

The proposal would impose tax hikes on corporations and wealthy Americans earning beyond $400,000 a year and plow that money back into federal programs for young and old. It would increase and expand government health, education and family support programs for households, children and seniors, and boost environmental infrastructure programs to fight climate change.

With Republicans opposed in lockstep to Biden's sweeping vision, Democrats have no votes to spare in the Senate, and just a few votes' margin in the House.

Pelosi has promised a Sept. 27 vote on a companion bill, a $1 trillion bipartisan infrastructure bill of public works projects that enjoys widespread support from both parties in the Senate, though House Republicans mostly oppose it.

Even though that bipartisan bill should be an easy legislative lift, it too faces a political obstacle course. Dozens of lawmakers in the Congressional Progressive Caucus are expected to vote against it if it comes ahead of the broader Biden package. But centrists won't vote for the broader package unless they are assured the bipartisan bill will also be included.