Tuesday, October 19, 2021

Democrats mobilize to extend government funding, avert shutdown

Must read

(C) Reuters. FILE PHOTO: The U.S. Capitol is seen in Washington, U.S., September 27, 2021. REUTERS/Elizabeth Frantz/File Photo

By David Morgan and Richard Cowan

WASHINGTON (Reuters) -Democrats in Congress on Wednesday mobilized to defuse one of several crises they face this week, saying they would vote to head off an imminent government shutdown before funding expires at midnight on Thursday.

The Senate could vote on Wednesday or Thursday to fund the government through early December, Senate Democratic Leader Chuck Schumer said. Lawmakers said the House of Representatives likewise would vote soon to provide funding for the new fiscal year that begins on Friday.

“With so many critical issues to address, the last thing the American people need right now is a government shutdown. This proposal will prevent one from happening,” Schumer said.

That legislation also will include disaster aid and funding for Afghan refugees, he said.

If it passes, that would avert a partial government shutdown in the middle of a national health crisis. President Joe Biden’s Democrats, who narrowly control both chambers of Congress, campaigned on a platform of responsible government after Republican Donald Trump’s turbulent four years in office.

But more risks lie ahead as progressive House Democrats are vowing to vote against a $1 trillion infrastructure bill set to come to the floor on Thursday, due to intraparty fights over a much larger social spending bill.

Behind it all looms the threat of the federal government hitting its $28.4 trillion debt ceiling around Oct. 18, an event that could cause a historic default with long-lasting economic fallout.

With such a daunting agenda hanging in the balance, Biden canceled a Wednesday trip to Chicago so that he could lead negotiations with Congress, the White House said.

The House and Senate may vote on a separate bill that temporarily lifts the debt limit, although that is the subject of a bitter partisan fight.

Senate Republicans refuse to vote for it, telling Democrats to act alone, while Schumer has demanded bipartisan cooperation on a measure to address debts racked up during Democratic and Republican administrations.

That left Democrats scrambling to find a way to pass a bill and avert a federal debt default that likely would put financial markets into a tailspin.

“There’s a number of options, but you can take it to the bank Democrats will not let the government default even if Republicans will not vote for it,” Democratic Senator Tim Kaine predicted.

Investment bank Goldman Sachs (NYSE:GS) this month described the standoff as “the riskiest debt-limit deadline in a decade.”

DIVISIONS BETWEEN MODERATES, PROGRESSIVES

Amid all this, Biden is holding intensive negotiations with his fellow Democrats in Congress on a bill as large as $3.5 trillion to expand social programs and address climate change. Multiple senior Democrats have said that bill will need to be scaled back to pass.

“We’re still meeting in good faith,” moderate Democratic Senator Joe Manchin told reporters following a 90-minute meeting with Biden on Tuesday. He said the overall dollar amount of the bill was not even discussed much less agreed on yet.

With deep divisions between Democratic moderates and progressives over the size and scope of that measure, it appeared unlikely they would meet their end-of-week goal of finalizing a bill.

The disarray deepened when House Speaker Nancy Pelosi stepped back from her promise to move the far-reaching legislation alongside the $1 trillion infrastructure investment bill that already has cleared the Senate on a bipartisan vote.

Progressive (NYSE:PGR) Democrats have threatened to vote against the smaller bill unless the larger one is nailed down first.

Representative Pramila Jayapal, who heads the Congressional Progressive Caucus, told reporters on Tuesday that she thought the vote on the infrastructure bill could be delayed.

Moderate Democratic Representative Josh Gottheimer, referring to the infrastructure bill, struck a more optimistic tone, saying: “We’ll get the votes, we’ll land the plane and we’ll get this done.”

Democrats mobilize to extend government funding, avert shutdown

Latest article

Subscribe to our newsletter

To be updated with all the latest news, offers and special announcements.