The House will reconvene on Tuesday to take up a three-month extension of the federal government’s borrowing authority, creating a year-end fiscal cliff that lawmakers must scramble to avert in December.
Late Thursday, the Senate celebrated the bipartisan passage of legislation that will raise the debt limit by $480 billion, providing the Treasury with the ability to borrow money until Dec. 3.
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The measure forestalls an immediate borrowing crisis that Treasury Secretary Janet Yellen warned would have left the United States in default on its loans after Oct. 18 when the last emergency measures could be employed to keep money flowing.
But the new date means lawmakers will have to reach a multilayered accord on both the debt limit as well as federal government spending, which also runs out on Dec. 3.
Democrats voted for the short-term solution but complained it made little sense to pass a three-month extension when the same partisan battle will likely erupt in December, just as lawmakers are scrambling to reach a deal on fiscal 2022 government funding.
A stopgap funding measure, known as a continuing resolution, expires on Dec. 3.
“We’ll be back in the same position” in December, Sen. Chris Murphy, a Connecticut Democrat, said, calling the extension “nonsensical.”
Murphy and other Democrats agreed to vote for the new December extension because it was the only way Republicans would agree to provide the 10 votes needed to pass it.
Democrats say the agenda is now cleared for lawmakers in their party to negotiate a deal on President Joe Biden’s Build Back Better plan, which they hope will spend trillions of dollars on a broad array of new social welfare programs and green energy policies.
“Now, we’re going to spend our time doing child care, healthcare, and fighting climate change,” said Sen. Elizabeth Warren, a Massachusetts Democrat.
Speaker Nancy Pelosi, a California Democrat, wrote to fellow Democrats on Friday, calling on them to use a two-week recess to “communicate to the American people” the benefits of passing the social welfare spending package.
“Fortunately, we have already passed a CR until Dec. 3 to keep government open until we pass the full appropriations bill,” Pelosi said.
But Democratic lawmakers are now facing a massive to-do list that must be completed by the end of the year.
They’ve yet to reach an agreement on the Build Back Better plan.
Senate centrist Joe Manchin has stood firm on a $1.5 trillion spending limit, which is far below the $3.5 trillion price tag initially set by House and Senate Democrats. Sen. Kyrsten Sinema, an Arizona Democrat, is also calling for a lower price tag.
Democrats will have just a few legislative weeks to negotiate and pass the deal through both chambers, along with a critical, bipartisan infrastructure package that makes up the second half of Biden’s economic agenda.
By late November, they’ll have to turn their attention back to the debt ceiling and government funding.
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Pelosi, in her letter to lawmakers on Friday, insisted a deal was in the works despite no discernible movement in talks between Manchin and Biden.
“Day by day, we are proceeding with a sharpened pencil to meet the challenge to Build Back Better, which, though smaller, is still transformative,” Pelosi said.
