U.S. House approves bill to suspend debt limit, fund government

WASHINGTON, Sept. 21 (Reuters) – House Democrats passed a bill on Tuesday to fund the U.S. government through December 3 and put the nation’s credit limit through the end of 2022, and sent it to the Senate, where Republicans have vowed to block it.

The vote in the House of Representatives was 220-211 along the party lines. It was unclear how quickly the Senate would act.

If Republicans persist in their refusal to endorse the move in the Senate, Democrats will need to develop a new strategy or quickly face the dual problems of a partial shutdown government unable to pay its bills and the risk of default for the first time in modern history.

House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer set the stage for a showdown with Republicans on Monday when they said they would combine spending and debt measures into one bill despite being the Senate Republican leader , Mitch McConnell, had promised to block an increase in the $ 28.4 trillion debt ceiling.

On Tuesday, McConnell reaffirmed that vow. But he also said, “Let me repeat once more: America must never go bankrupt. We never have and we never will.”

Speaking to reporters, McConnell reiterated his weeks-long argument that it was the majority party’s responsibility to raise the debt ceiling. As a result, Republicans would not be able to vote to raise the debt ceiling before next year’s congressional elections.

Following the House vote, McConnell and his Republican Senator Richard Shelby said they had tabled a bill to fund day-to-day government until December 3, but without raising the debt ceiling.

Republicans have said the Democrats could raise the debt ceiling through reconciliation themselves, a maneuver that circumvents the Senate’s rule that 60 of the Chamber’s 100 members must pass laws. The Democrats have so far opposed this, saying that the vote on raising the debt ceiling should be cross-party.

“Playing games with the debt ceiling means playing with fire and putting it on the backs of the American people,” Schumer said in a speech.

Schumer and Pelosi will meet with their Democrat, President Joe Biden, at the White House on Wednesday afternoon, a source familiar with the planning said.

The meeting comes as Washington grapples with the two deadlines for funding the government and raising the debt ceiling, as well as the Democratic push to end Biden’s mammoth $ 3.5 trillion agenda with the reconciliation maneuver.

SEPT. 30 DATE

Congress has a September 30 deadline to approve bridging funding that would partially prevent government shutdowns when the new fiscal year begins on October 1.

The Treasury Department will exercise its borrowing powers at some point in October unless the debt ceiling is raised.

The bill would suspend government borrowing limits until December 2022.

At $ 28.78 trillion, the current debt ceiling has already been exceeded. It is temporarily funded through “extraordinary measures” by the Treasury Department, which is expected to be exhausted by October.

As Congress moves towards a possible partial government shutdown if an agreement is not reached, Democrats and Republicans have warned of dire consequences, including potential disruption to social security veterans and pensioners.

Republicans said they would support a provisional spending bill to avert a shutdown if the debt ceiling extension were removed from the bill.

Schumer said a historic breach of the borrowing authority could hit the U.S. economy, raise consumer interest rates, and potentially force state governments to raise taxes to cover their higher interest payments.

“Republicans just don’t have to vote to force a default,” said Schumer.

Republicans argued that while they don’t want a default on debt, they don’t support raising the credit limit at a time when the Democrats are trying to exceed such a large amount of new domestic spending – programs that the Democrats say is paying with tax hikes for the rich become and corporations.

“The bill that Speaker Pelosi is putting through this week will not become law. You have to go back to the drawing board,” said Second House Republican Steve Scalise at a press conference.

Schumer said much of the recent debt is related to spending Republicans supported during Donald Trump’s presidency, including December’s COVID-19 Emergency Relief Act.

Reporting by Richard Cowan and Susan Cornwell; Additional coverage from David Morgan; Editing by Scott Malone, Kieran Murray, and Peter Cooney

Our Standards: The Thomson Reuters Trust Principles.