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Home approves funding, debt ceiling

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House Speaker Nancy Pelosi (D-CA) walks in Washington, DC after her weekly press conference at the U.S. Capitol on August 25, 2021.

Kevin Dietsch | Getty Images

The House of Representatives passed a bill on Tuesday that would both prevent the government from closing and suspend the debt ceiling to prevent a possible economic disaster.

The chamber approved the plan with 220 to 212 votes. All Democrats voted in favor and all Republicans were against.

However, Senate Republicans have threatened to increase the bill, which could lead Democrats to find another way to avoid federal funding defaults – or even an initial default on U.S. debt. Concerns about an impending payment default and the associated economic damage contributed to a threat on the US stock market on Monday.

Congress must pass a funding plan by September 30th to prevent a shutdown. Regardless, the US will exhaust all of its options to keep paying its bills sometime in October, Treasury Secretary Janet Yellen told congressional leaders.

The plan, passed by the House of Representatives, would keep the government going until December 3rd. It would also suspend the debt ceiling through December 2022.

The bill would also allocate $ 28.6 billion to disaster relief and $ 6.3 billion to relocate Afghan refugees.

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Senate Minority Leader Mitch McConnell, R-Ky., Said Republicans would vote for a standalone funding bill but not a bill suspending the debt ceiling.

While Democrats have pointed out that the GOP has signed huge coronavirus emergency laws since the last debt ceiling suspension, Republicans have said their counterparts should do their own thing to prevent a default as they prepare to host a mammoth Expenditure Act without passing the GOP.

Before the House vote, Senate Majority Leader Chuck Schumer, DN.Y., warned Republicans that failing to raise the debt ceiling could wreak havoc on the economy and key government benefits like social security.

“It’s a game with fire. Playing games with the debt ceiling means playing with fire and putting it on the backs of the American people,” he said on Tuesday.

It’s unclear what the Democrats would do if the Senate bill were to fail.

They could add a debt ceiling suspension to their $ 3.5 trillion balancing act. This would add additional steps to an already chaotic and time-consuming process.

The proposal, at the heart of President Joe Biden’s domestic agenda, would invest heavily in the social safety net and climate policy. Republicans want Democrats to tie the suspension of the debt ceiling to the sweeping bill that Democrats want to pay through tax hikes for businesses and the rich.

This story evolves. Please check again for updates.

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