House Speaker Nancy Pelosi said Congress will not raise the soon-to-expire federal borrowing limit without the help of Republicans, setting up a spending showdown that could soon leave the Treasury lacking the funds to pay the nation’s bills.
The California Democrat made the pledge hours after receiving a letter from Treasury Secretary Janet Yellen warning that the Treasury will run out of borrowing authority in October.
“We’ll have several options,” Pelosi told reporters who asked her how she planned to bring up legislation raising the debt ceiling. “But it has to happen.”
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Pelosi said Democrats will not put a debt limit increase into a social welfare spending bill that they have authorized to pass without GOP support in the Senate. Instead, it will piggyback on legislation that typically requires 60 votes in the Senate, including 10 Republicans.
The move ensures a fight with Republicans, who have pledged to oppose any borrowing increase.
Republicans have called on Democrats to raise the debt ceiling on their own, suggesting they include it in a massive social welfare spending bill the GOP labeled as “reckless.”
But Pelosi rejected having Democrats pass it unilaterally, blaming the need to borrow money on Trump-era tax cuts that reduced federal revenue streams.
“We won’t be putting it in reconciliation,” Pelosi said, adding that the need to raise the debt ceiling “is paying off the Trump credit card.”
Pelosi’s pledge ensures a standoff with Republicans on the debt ceiling.
The Treasury needs a higher borrowing limit to continue paying the nation’s bills, and without it, the federal government can only operate on incoming revenues, which fall far short of what is needed to operate government departments and agencies.
Yellen has warned that the failure to increase the debt ceiling would be “catastrophic.”
Republicans are daring Democrats to raise the debt ceiling on their own.
Senate Minority Leader Mitch McConnell said he does not expect Senate Republicans to give Democrats the votes they need to pass a debt ceiling increase when Democrats are working to pass a $3.5 trillion social welfare spending package that the GOP opposes. Democrats plan to pass that bill without a single Republican vote.
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“Let me make something perfectly clear: If they don’t need or want our input, they won’t get our help,” McConnell said in August. “They won’t get our help with the debt limit increase that these reckless plans will require.”
Yellen wrote to lawmakers Wednesday that “cash and extraordinary measures will be exhausted during the month of October” and said, given the economic blow delivered by the COVID-19 pandemic, “it would be particularly irresponsible to put the full faith and credit of the United States at risk.”
