Topline
Republicans shut down the latest Democratic tactic to quickly raise the debt ceiling Tuesday afternoon as the U.S. approaches a possible default on its debt. This is a move that government officials and experts believe would cause economic disaster.
Senate Minority Leader Mitch McConnell, R-Ky. Listens as he (and the GOP leadership) speak to reporters following a weekly GOP policy meeting at the Capitol in Washington on September 21, 2020. (AP Photo/J. Scott Applewhite) ASSOCIATED PRESS
The Key Facts
Senate Majority Leader Chuck Schumer (D.N.Y.) wanted unanimous consent to lower the threshold for raising the debt ceiling from 60 votes down to a simple majority. However, Minority Leader Mitch McConnell was against it. The Senate's current status means that all Democrats and 10 Republicans would need to agree to raise the debt ceiling. Otherwise, the country could default on its debt payments. Treasury Secretary Janet Yellen claims this would occur around October 18. McConnell is opposed to raising the debt ceiling. This could open the door for Democrats to increase government spending while they move forward with a $3.5 billion budget package. Democrats want bipartisan support to raise the debt ceiling because it has been increased by increased spending from both parties in recent years. Republicans suspended the debt ceiling under President Donald Trump and claim that it is now the responsibility of the Democrats to raise it, since they control both the White House and Congress.
Important Quote
McConnell stated that there is no chance that the Republican conference will not do everything to help Democrats save their energy and time so they can continue ramming through partisan socialistism as quickly as possible.
What to Watch
Yellen sent a Tuesday letter to Nancy Pelosi (D.Calif.), warning of "substantial disruptions in financial markets" if lawmakers fail to act fast to raise the debt limit. The White House warned earlier this month that defaulting in debts could result in federal disaster relief, infrastructure funding, and Medicaid being halted.
Important Background
There are many other issues that complicate the debt ceiling, which has caused a split in Congress between Republicans and Democrats. Since the Thursday deadline is approaching, funding the federal government is of primary concern. Both parties' leadership claims there is support for funding the government. However, Republicans are not willing to move forward with plans that would increase the debt ceiling. Senate Democrats tried to pass Monday a bill that would have funded government and raised debt ceiling. But the plan was killed by Republicans. Although it's unclear what the Democrats plan now, they could agree on a separate bill to temporarily fund government until October 1. They could also add to the $3.5 trillion budget that they are trying to pass through reconciliation, which does not require Republican support.
Big Number
$28.4 Trillion This is the current U.S. debt limit.
Tangent
Complicating matters further is the fact that Democrats in Congress are trying to get enough support to pass a $1 billion infrastructure package. Pelosi has scheduled a Thursday vote on the package.
Continue reading
What the Debt Ceiling and Government Shutdown Really Mean (Forbes).
Yellen warns that the Treasury will run out of cash on October 18th, causing serious harm to businesses (Forbes).
All you need to know (Yahoo! News
