KEY POINTS

  • Democrats struggling for consensus on a bill that will extend government funding
  • Dems are also faced with the possibility of seeing the U.S. hitting its debt limit
  • The $1.2 trillion infrastructure bill and $3.5 trillion social reform bill are on the line

Democrats are in a serious bind as they rush to reach an agreement with Republicans before Friday on a bill that will fund the government and suspend the debt ceiling, or see the federal government shut down.

On Monday, Senate Republicans blocked the bill that could have funded the government through December and suspended the U.S. debt ceiling until after the midterm congressional elections. If lawmakers are unable to pass an appropriations bill before midnight Thursday, government funding will lapse, resulting in a shutdown.

The previous government shutdown in December 2018 was a partial closure. If the shutdown occurs this week, it is expected to be a full shutdown as Congress has not yet passed any funding bills, CBS News reported. A full shutdown means more federal agencies will be affected, including hundreds of thousands of federal workers, multiple government services, and national parks.

Government funding and the U.S. debt ceiling are two different matters, but Democrats combined both in a single bill, risking not just a fully operational government during a pandemic, but the country potentially hitting its debt limit.

Chief Executive of JPMorgan Chase & Co Jamie Dimon told Reuters Tuesday that while the investment banking company has started preparing for the possibility of the U.S. reaching its debt limit, it hopes lawmakers will avoid that “potentially catastrophic event,” adding that the company has implemented scenario planning for a possible U.S. credit default thrice already. The Bipartisan Policy Center estimated that the U.S. Treasury will run out of cash between Oct. 15 and Nov. 4, the New York Times reported.

Before the vote failed Monday, Senate Minority Leader Mitch McConnell, R-Ky, tried to bring an appropriations plan to the table – one that did not address the U.S. borrowing limit. However, Sen. Patrick Leahy, D-Vt., opposed the move. Following the 50-48 vote, Republicans said Democrats should suspend the debt ceiling without GOP support as they try to pass President Joe Biden’s $3.5 trillion package.

A White House official said Biden postponed a Chicago trip Wednesday to stay in Washington as he continues to battle for his $1.2 trillion infrastructure bill and the $3.5 trillion social reform package. House Speaker Nancy Pelosi, D-Calif., scheduled a Thursday vote on the infrastructure bill, but is faced with some opposition. “We will hold the line and vote it down,” said Rep. Rashida Tlaib, D-Mich.

Rep. Pramila Jayapal, D-Wash., also noted that since the bill “is the president’s agenda,” there are other liberals willing to sink the bill in favor of the bigger package, The Hill reported.

Republicans, pictured at a press conference in the US Congress on September 22, 2021, say Democrats need to take ownership of debt increases while they run the House, Senate and White House
Republicans, pictured at a press conference in the US Congress on September 22, 2021, say Democrats need to take ownership of debt increases while they run the House, Senate and White House AFP / Olivier DOULIERY
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