On Tuesday, Senator Democrats tried to raise the debt limit on their own but were stopped by Mitch McConnell.
McConnell insists that Democrats are the only ones responsible for raising the debt limit.
The federal government is on the brink of either defaulting on its debt or shutting down.
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Senate Minority Leader Mitch McConnell, the Senate's Senate Minority Leader, rejected Chuck Schumer’s request to suspend the debt limit. This resulted in the government being closer to default and shut down.
McConnell tweeted, "Democrats will not get bipartisan support paving a pathway to partisan recklessness."
McConnell insists that Democrats raise the debt limit on their own. He says that Republicans shouldn't be involved in the funding of the $3.5 trillion social spending bill. McConnell opposed McConnell's Tuesday request for unanimous consent to suspend the debt ceiling, something Democrats could do on their own. Instead, McConnell suggested that Democrats use the reconciliation process to raise the limit.
McConnell and all Senate Republicans blocked a measure to prevent a shutdown of the government and a default on Monday. It had passed the House last Wednesday.
On Tuesday, Janet Yellen, Treasury Secretary, told Congress that Congress has until October 18th to raise or suspend its debt limit. After which the government will run out of money and will default on its debt. Yellen had predicted that the money would run out in October. However, she did not give a date and urged Congress to act now because of the economic uncertainty caused by the pandemic.
Democrats have more time now to stop a default on the debt, but they are reluctant to resolve the issue through reconciliation, as it would be too slow to go back to amend and debate the legislation. Schumer said Tuesday to reporters that he does not believe that this route should be taken.
He said, "It's very very risky." "We are not going to pursue that."
Failure to act quickly to prevent a default on debt can have dire consequences. Yellen stated last week that allowing a debt default would result in "economic catastrophe", delaying Social Security payments, increasing unemployment, and the White House shared these concerns in a memo to state- and local governments. A government default could potentially lead to big cuts to measures such as Medicaid and free school lunches.
Tuesday's speech by Yellen to Congress stated that it was a worst-case scenario in which the dollar would lose its foundation as the global financial system's bedrock.
