The Senate on Tuesday passed a measure to raise the debt ceiling, which will allow the government to borrow more money and allow Democrats to work on passing their social spending package, which faces an uncertain fate in Congress.
The Democratic party wants to negotiate their social spending package by Christmas. Bank says that's unlikely.
The Associated Press.
The debt limit resolution passed the Senate in a party-line vote of 50 to 49, with Sen. Cynthia Lummis missing the vote due to sickness.
The bill is expected to pass in the House, with one Republican joining Democrats in support, after being pushed forward last week in a near-party-line vote.
Senate Majority Leader Chuck Schumer said on the chamber floor that he believed the increase was a level that would allow lawmakers to avoid the debt limit negotiations.
The funding deadline for the $1 trillion infrastructure bill was set last month by Treasury Secretary Janet Yellen, who warned that the Treasury would likely need the funding on Wednesday.
With debt limit legislation out of the way, the Senate is free to take up Biden's proposal, which the White House wants to pass before Christmas.
Bank of America said in a note to clients this week that the deadline isoptimistic and that key provisions of the bill are still being negotiated among Democrats.
The Senate will have to trim the bill down to about 1.5 trillion because of opposition from Sen. Joe Manchin and Sen. Kyrsten Sinema, who have refused to support the package over concerns about heightened inflation.
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In a party-line vote, the House Democrats passed the Build Back Better Act last month. The plan went through a round of cost cuts last month in an attempt to appease Manchin and Sinema. The framework calls for lower spending than originally proposed. The child tax credit expansion was supposed to last four years, instead of one. Two years of tuition-free community college for all Americans and a provision to create the first-ever federal benefit to guarantee paid work leave for family and medical reasons have been removed.
The quote is crucial.
Biden said that the debt limit is a basic responsibility of the federal government. This legislation will allow the Treasury to finance spending and tax cuts that Congress has already authorized and to keep its commitments without causing disruption or harm to our economy and American families.
There is a structure called the Tangent.
If Congress fails to raise or suspend the debt ceiling, the Treasury would be unable to fulfill its basic functions, such as providing financial assistance. It could take decades to recover from the fact that roughly 56 million Social Security recipients may not receive their payments on time or at all in the event of a default, according to White House economists.
Is it a default Averted? The Senate passed a bill allowing Democrats to raise debt limits.
If Congress doesn't raise the debt ceiling again, the U.S. could run out of cash by mid-December.
What is in the Democrats' plan? Free preschool, child tax credit expansion, and more are available.
