Debt limit hike headed to passage in US House, staving off default

The Democratic-controlled U.S. House of Representatives is expected on Tuesday to give final approval to a Senate-passed bill temporarily raising the government's borrowing limit to $28.9 trillion

The Democratic-controlled U.S. House of Representatives is expected on Tuesday to give final approval to a Senate-passed bill temporarily raising the government's borrowing limit to $28.9 trillion (Tom Brenner, Reuters)

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WASHINGTON — A majority of the U.S. House of Representatives on Tuesday voted to pass legislation raising the Treasury Department's borrowing limit to $28.9 trillion, averting a debt default that otherwise could have occurred around Oct. 18.

President Joe Biden is expected to promptly sign the bill into law. The new level of borrowing authority is expected to be exhausted around Dec. 3, requiring Congress to act again before then.

Democrats, who control the House by a thin margin, were expected to maintain party discipline and pass the hard-fought, $480 billion debt limit increase, only to face another deadline within weeks for avoiding both a historic debt default and a temporary government shutdown.

Looking past Tuesday's vote, House Speaker Nancy Pelosi told reporters she hoped there could be a future bipartisan solution to the debt ceiling issue, despite top Senate Republican Mitch McConnell's warning that his party will not help next time.

Pelosi said a Democratic proposal to allow the Treasury Department to lift the debt ceiling, with Congress having the ability to overrule it, "has merit."

She also repeated that Democrats do not want to use a procedural maneuver called "reconciliation" to raise the debt ceiling. That is precisely what Democrats will need to do to get the December hike through the Senate if Republicans try to block them and no other solution is found.

The Senate's vote last week to raise the limit — often a routine step — turned into a partisan brawl, with Republicans trying to link the measure to President Joe Biden's goal of passing a multitrillion-dollar pair of bills with spending to bolster infrastructure and social services while fighting climate change.

In fact, the debt ceiling vote is to cover past spending already approved by Congress, including during Republican Donald Trump's presidency.

Pelosi said meanwhile she is optimistic that Democrats can work out the changes they need to make to their multi-trillion dollar social policy spending bill "in a timely fashion." Asked if Democrats could do this by Oct. 31, she repeated that she was "optimistic."

The Democratic-controlled Senate last Thursday passed the bill raising the $28.4 trillion statutory limit with the help of 11 Republicans, as the country crept closer to an estimated Oct. 18 deadline when the Treasury Department will no longer have the ability to make debt payments to lenders.

House Republicans are expected to vote no on Tuesday.

Pelosi, a Democrat, cannot afford more than three members of her caucus members voting against the debt limit increase and still prevail on Tuesday, if all Republicans oppose the rise.

On Sept. 29, two Democrats out of 220 voted against a separate bill to raise the debt limit through the end of 2022, while only one Republican voted in favor.

That measure was blocked in the Senate, which then had to resort to the much shorter increase now moving through Congress.

Eye on 2020 elections

On Sunday, Treasury Secretary Janet Yellen characterized the debt limit increase as a "housekeeping chore" to cover payments for spending bills and tax cuts already enacted into law.

But it has turned into a far bigger thing.

The months-long fight over the debt limit is closely tied to the November 2022 congressional elections when Republicans are trying to gain majorities in both chambers of Congress.

Democratic lawmakers fear that a Republican boycott of efforts to raise the debt ceiling will leave them exposed to political attack ads over the next year that accuse Democrats of fiscal malfeasance and disregard for the ballooning debt.

In a letter to Biden on Friday, McConnell wrote: "I will not be a party to any future effort to mitigate the consequences of Democratic mismanagement."

During the Trump administration, the debt limit was raised three times with the support of Democrats, despite their uniform opposition to Republicans' 2017 tax-cut legislation and some of Trump's spending priorities, including the construction of a southwest border wall to keep out immigrants, all of which added to government debt.

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