Reuters File Photo: US Capitol Building on Capitol Hill, seen at sunset in Washington, USA, September 30, 2021. Reuters / Elizabeth Frantz
By David Morgan and Susan Cornwell
WASHINGTON (Reuters) – Democrats in President Joe Biden planned a Senate vote Wednesday to postpone the U.S. Senate vote limit, creating another conflict with Republicans that risked defaulting on an economically crippled federal credit.
The chamber’s top Republican, Mitch McConnell, said Tuesday that the effort seemed to be failing and that members of his party would already cancel the vote twice. McConnell called on Democrats to raise the bar further, using more complex methods that Democrats have rejected as ineffective.
“They have time to do it,” McConnell told a news conference.
In the absence of a clear solution, Congress appears to be pushing the U.S. government closer to unprecedented and unnecessary defaults, which analysts say will hurt the global financial system, increase orrow costs and eliminate millions of jobs.
Treasury Secretary Janet Yellen says the government will end its ability to take over by October 18 if Congress does not raise the country’s 28 28 trillion authority.
Democrats narrowly control both chambers of Congress, and the House of Representatives last week voted to suspend the debt limit until the end of 2022.
But Democrats need at least 10 Republican votes to remove a systemic hurdle in the Senate, which is evenly divided between the two parties. Republicans blocked two more attempts to raise the debt limit last week.
“If Republicans want to vote ‘no’ tomorrow, if they really want to be the default party, that’s their choice,” Schumer said on the Senate floor. “They still have a chance to show that they are still responsible. It’s not too late. But it’s closing dangerously.”
Republicans say the unpleasant act should be the responsibility of the party in charge. If they succeed in forcing Democrats to raise their own thresholds, the problem will probably be fed up with advertising for attacks on Democratic candidates in the 2022 congressional election.
McConnell called on Democrats to use a complex method known as budget reconciliation, which would not require a Republican vote.
Biden and Schumer have dismissed the reunion as extremely confusing and risky, and warned of economic catastrophe if Republicans do not change course. But Schumacher did not blow it up at a news conference on Tuesday.
Democratic Senator Chris Van Holen said his party has other options, but he declined to spell them out. “We’ll find a way to do that,” he said.
Without a quick fix, some government services may be suspended, such as the payment of Social Security benefit checks to the elderly.
Even a closed call can probably be detrimental. A 2011 debt limit dispute, which was resolved by Congress two days before the resolution reached its limits, caused the stocks to collapse and the U.S. to request a credit downgrade for the first time.
Using reconciliation could consume Congress attention, reduce Biden’s ability to reach agreement on his multimillion-dollar social agenda, and reduce his support among moderate and progressive Democrats.
The reconciliation process will require Democrats to adopt a fixed dollar figure for a new, higher debt ceiling, rather than simply postponing the issue after the November 2022 election.