“It’s not too late but it’s getting dangerously close,” Schumer, D-N.Y., said on the Senate floor Tuesday, imploring passage of the bill by the end of the week. “We can resolve the debt ceiling this week and reassure the world that the full faith and credit of the United State will never be in question. Democrats are going to do the responsible thing and vote yet to prevent a default.”
The national debt, now approaching $29 trillion, keeps rising due to past tax and spending decisions made by both parties. Republican leaders have said they won’t participate in helping Democrats raise the ceiling this time because Democrats hold both chamber of Congress and the White House and because they say Democrats have not included them enough in spending decisions since Biden took office in January.
If the U.S. defaults on its debt for the first time, the results could lead to a global recession, Treasury officials and experts say. A tanked market would hurt 401(k)s and other investments. For example, a debt ceiling standoff in 2013 cost the economy 1% in GDP.
– Ledyard King and Mabinty Quarshie
The delay is caused by partisan disagreements on Capitol Hill, where Democrats are insisting Republicans vote with them to raise the limit. But Republicans say they won't help and want Democrats to use a process called reconciliation, which would allow Democrats to raise the debt ceiling without Republican support.
Congressional Democrats and President Joe Biden are working towards a deal on their spending bill in an effort to bring every congressional Democrat on board, with the White House offering between $1.9 trillion and $2.2 trillion in an effort to win over moderates balking at its size and scope, according to two sources familiar with the negotiations.
Biden asked House Progressives to lower their spending bill by more than $1 trillion during a virtual call Monday afternoon on his 10-year, $3.5 trillion Build Back Better Act, while progressives countered with $2.5 trillion, according to one of the sources.
Biden has been trying to unite a divided caucus behind a far-reaching proposal that would address social welfare priorities that are a priority for progressives, such as climate initiatives, and subsidized caregiving, childcare, pre-kindergarten and community college. But centrists, notably Democratic Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, have resisted such a massive spending program.
Last week, Manchin revealed that he would be willing to go as far as $1.5 trillion but was adamant about not going along with most of what progressives want.
"I cannot – and will not – support trillions in spending or an all or nothing approach that ignores the brutal fiscal reality our nation faces," he said.
On Tuesday, a spokesperson for Manchin said he had no new comments in reaction to the president’s new funding target.
– Ledyard King and Savannah Behrmann
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