NAICU Washington Update

Clock is Ticking on Budget Issues

October 01, 2021

On the brink of a new fiscal year, Congress was able to pass a continuing resolution to avoid a government shutdown by mustering the bipartisan votes to keep the government open until December 3. However, the clock is still ticking on the debt limit, and Democrats have missed their nonbinding deadline for passing their priorities in infrastructure and social programs. 

While important to the Democratic Party and the Biden Administration, neither of these bills are “must pass” legislation the way addressing the debt ceiling or continuing resolution is. Without an extension or suspension of the debt ceiling, the nation is at risk of another economic recession.  

Treasury Secretary Janet Yellen has indicated that by mid-October the agency will exhaust its ability to engage extraordinary measures to avoid defaulting on the national debt. The House passed an extension of the debt ceiling through December 2022, but that version could not pass the Senate. A 60-vote bipartisan margin is needed to pass the Senate, but Republicans would not support the proposed extension through the mid-term elections. 

Congress was expected to quickly pass the infrastructure and social spending packages this summer, but the more time has passed, the more bogged down their outlook has gotten politically. While the physical infrastructure package was negotiated on a bipartisan basis with the White House, and passed the Senate early this summer, it has not yet been considered in the House. House Speaker Nancy Pelosi (D-CA) leveraged the bipartisan package to broker an agreement  between the moderate and progressive wings of her caucus for moderate support of the $3.5 trillion reconciliation package that will only pass with Democratic votes. As the nonbinding promise of a vote on the infrastructure package by September 27 came and went, both factions of the party in the House have gotten skittish about their support for the other faction’s package. 

In the Senate, pressure from Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) to reduce the spending amount in the package has resulted in multiple meetings with the White House and congressional leadership, but with no final results so far. Negotiations are expected to continue this weekend. 

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