Congress averts government shutdown, remains in stalemate over debt limit

Congress narrowly avoided a government shutdown on Thursday by passing a stopgap funding bill with back-to-back votes in the House and Senate, just hours before the midnight government funding deadline.

President Biden was expected later Thursday to sign the legislation, which will fund the government through Dec. 3. The bill also includes $6.3 billion for the relocation of Afghan refugees and $28.6 billion in federal disaster relief in response to recent hurricanes and wildfires.

But as lawmakers breathed a sigh of relief over averting a shutdown, the Democratic-run Congress still must address the debt limit by Oct. 18, when Treasury Secretary Janet Yellen said the government will run out of money to pay the country’s obligations.

The short-term funding bill passed after Senate Republicans had blocked legislation earlier in the week that paired the temporary funding with a suspension of the debt limit. GOP lawmakers say they refuse to help allow more borrowing ahead of Mr. Biden’s more than $4 trillion in new spending.

The move left Democrats scrambling to introduce a “clean” bill to fund the government ahead of the quickly approaching deadline.

Senate Minority Leader Mitch McConnell, Kentucky Republican, urged Democrats to put forward a “clean” funding bill “without the poison bill of a debt limit increase.”

After two days of backroom haggling, the Senate passed the funding bill early Thursday in a 65 to 35 vote, before its final passage in the House, 254 to 175.

“We are able to fund the government today because the majority accepted reality,” Mr. McConnell said.

House Democrats continued to deride Republicans for blocking the combined measure which would have addressed the debt ceiling as they took up the bill for final approval.

“Just last week, we were here urging our Republican colleagues to help us avert a government shutdown,” Rep. Debbie Wasserman Schultz, Florida Democrat, said on the House floor Thursday. “We’re back because congressional Republicans refused to pass the government funding bill since it included a provision that ensures America pays our bills for debt already incurred on their watch under the Trump administration.”

She said, “The brinksmanship and the last-minute handwringing, gut-wrenching angst that we are put through, and that America is put through every single time when the Republicans refuse to be fiscally responsible, is jaw-dropping.”

But with the immediate crisis of a government shutdown averted, Democrats have relinquished a key lever to force Republicans to back the politically taxing measure to suspend the debt limit.

Despite Ms. Yellen’s repeated warnings of a financial crisis if the debt limit isn’t raised by Oct. 18, Congress remains in a stalemate.

The national debt currently tops $28.8 trillion, and a U.S. default would be unprecedented.

Democrats pressed for a bipartisan vote on the debt ceiling and warned that failing to do so would have disastrous consequences. Congress raised the debt ceiling three times under a Republican majority in the Senate during Mr. Trump’s tenure.

Democrats argue that the cap needs to be raised to accommodate spending under the Trump administration, rather than planned spending under Mr. Biden.

On Wednesday, the House passed a stand-alone measure to suspend the debt limit on a party-line 219-to-212 vote. Senate Republicans are expected to block the legislation, insisting that Democrats raise the debt limit using the same procedure that will allow them to pass with a party-line vote Mr. Biden’s $3.5 trillion social welfare and climate change bill.

“Just as our Republican colleagues realize that a government shutdown would be catastrophic, they should realize that a default on the national debt would be even worse,” said Senate Majority Leader Charles E. Schumer, New York Democrat. “Unfortunately, Republicans spent the week solidifying themselves as the party of default, the party that says America doesn’t pay its bills, the party that would send our economy into unknown and dangerous territory.”

Republicans want Democrats to fully own the debt hike in light of the massive spending they have in store.

Democrats, who control the White House and both chambers of Congress, can pass the debt ceiling package through a process known as budget reconciliation, which allows spending and revenue measures to avoid the 60-vote filibuster hurdle and pass with a simple 51-vote majority.

That is how they intend to pass Mr. Biden’s massive spending bill for anti-poverty, education, health care and climate change programs.

The budget reconciliation process has been used only a few times to raise the debt limit. Adding the measure to the $3.5 trillion in spending would unlock more division among Democrats. House Speaker Nancy Pelosi, California Democrat, told reporters Wednesday that including the debt ceiling suspension in the reconciliation bill is off the table.

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