The Debt Limit – Everything You Need to Know

Democrats are indicating, in order to prevent a government shutdown, they are happy to ditch the debt ceiling from their federal funding deal this week.

This new change is one indicating Democrats’ narrow majorities are keen to avoid closure on their watch.

Borrow, Borrow, Borrow

Democrats’ proposals to finance the government and increase the debt ceiling at the same time were sunk by Republican senators on Monday evening.

This left Democrat politicians racing to avoid a government shutdown that would begin on Friday morning. Democrats stated afterwards they have various options, but a shutdown is not one of them.

A plan to finance the government until December and raise the debt limit past next year’s midterm elections was rejected by the GOP; the plan needed the support of ten Republicans to overcome a GOP filibuster.

However, it was only discussed by a few Republican senators and the measure appeared hopeless for days. The bill was defeated 48-50, with no Republicans voting in favor.

Democrats, on the other hand, are emphatic that, despite the Republican position, they will not accept a closure, even if it means removing the debt ceiling from their funding plan.

The debt limit deadline is still weeks away, but the government’s financing deadline is this Thursday. With the power of Congress and the presidency, Sen. Tim Kaine stated, “we’re not gonna let the government shutdown and we’re not defaulting.”

Rep. Rosa DeLauro, the chairwoman of the House’s budget committee, indicated Monday night that Democrats will come out with a new funding plan this week that does not include language to raise the debt ceiling.

Spending Less Might Help

DeLauro stated, “I’m sure there are really bright, clever individuals who can find out how you deal with the deficit. Our first priority is to keep the government open, which we intend to do.”

The swift retreat from a closure shows Democrats’ aversion to adding further controversy to their efforts to carry out President Joe Biden’s plan. They haven’t determined whether to defer the debt debate with conservatives until October or to remove it from the budget bill entirely.

Over the past few days, Majority Leader Chuck Schumer kept his aim a secret, instead opting to bash the GOP as “the vehicle of failure,” as he proclaimed on Monday.

Liberals will have to rapidly concoct a short-term budget bill that will garner broad support; or else, they face a government shutdown while attempting to resolve difficult intraparty disagreements over Biden’s jobs and family plan.

Even if conservatives’ reluctance to the debt limit is the primary reason for the possibility of both a funding gap and a possible default in the following weeks, a closure is the last thing Democrats’ shaky majorities want.