What Happens When The Clock Strikes Midnight?
The House and Senate are back in session this week for the first time since July. They are replaying a Cinderella story no one in Washington (or the stock market) likes: the end-of-the-fiscal-year scramble to fund the federal government before the clock strikes midnight on September 30.
But the stakes are higher this year than most. As we have noted before, mixed in with this year’s spending bill are the need to lift or suspend the debt limit, Democrats’ $3.5 trillion “human” infrastructure bill, a $1.2 trillion physical infrastructure bill, and a heap of other pressing deadlines.
Will Congress get the work done, or will it (and the economy) turn into a pumpkin?
House Passes Fiscal Year 2022 CR, but Senate Fight Will Be Tough
Yesterday, House Democrats released a short-term continuing resolution (CR) that would extend current federal government funding levels from October 1 to December 3, 2021, giving lawmakers nine additional weeks to figure out how to fund the federal government for the remainder of the year.
The bill also calls for suspending the debt ceiling — the nation’s borrowing limit — until December 2022, well after next year’s mid-term elections. Congress must raise or suspend the ceiling or the U.S. government risks defaulting on its credit sometime in mid-October. (Even though congressional debt ceiling skirmishes have become routine over the last decade, the nation never has exceeded its borrowing authority.)
The House quickly acted to pass the CR/debt ceiling measure, approving it last night. The 220-211 vote fell along party lines. Every Democrat supported it and not one Republican voted for it.
The bill now heads to the Senate where Majority Leader Chuck Schumer (D-N.Y.) must convince 10 Republicans to join Democrats in voting for it. Minority Leader Mitch McConnell (R-Ky.) has pledged that no GOP senator will vote for a CR that includes a debt ceiling increase. In fact, a week ago, he said, “Let me be crystal clear about this: Republicans are united in opposition to raising the debt ceiling.”
Some analysts have suggested Sen. McConnell’s stance is all about politics: he doesn’t want to force Republicans to vote for a debt ceiling increase 14 months before a midterm election in which control of the Senate is very much up for grabs.
But it’s not just vulnerable senators up for reelection who object to combining a debt ceiling hike with the CR.
As NBC News reported, Sen. Richard Burr (D-N.C.) “is retiring and doesn’t have to face voters again. Still, he said he isn’t interested in lifting the debt ceiling.” In fact, when “asked if he worries about an economic meltdown if the U.S. defaults, [Sen. Burr] deflected to Democrats.” Sen. Burr also ominously said, “It’s in their hands.”
And when asked if a debt ceiling/CR combo can win 10 Republican votes, Sen. Burr simply said, “no.”
The inclusion of disaster aid with the CR and debt ceiling bill could make it more difficult for Minority Leader McConnell to sustain GOP opposition, however.
Indeed, it already has.
Is Disaster Aid Enough of a Carrot for Republicans?
The House-passed CR also includes $28.6 billion to address the recent natural disasters that have ravaged almost every part of the country. Lawmakers who vote against the CR/debt ceiling bill essentially could be voting against billions of dollars in much-needed aid for their own communities.
According to The Hill, that prospect is too much for at least one Republican senator. Yesterday, Sen. John Kennedy (R-La.), whose state was pummeled by Hurricane Ida, said he will “probably” vote for the CR/debt ceiling bill. His Louisiana colleague, Sen. Bill Cassidy (R-La.) is likely to join him.
Meanwhile, Minority Leader McConnell dug in.
On Monday, he said that while Republican senators support disaster relief funds, adding them to the debt ceiling increase will not sway the GOP. “Senate Republicans would support a clean continuing resolution that included appropriate disaster relief and targeted Afghan assistance,” Sen. McConnell said. “We will not support legislation that raises the debt limit.” So far, Senate Republicans largely appear to be backing McConnell. As of this morning, only four GOP senators seemed inclined to even possibly support the CR, well short of the 10 needed to pass it through the Senate.
Does that mean the United States is really at risk of default? Not necessarily. Congress still has time to go back to the drawing board before the clock strikes midnight.
Indeed, House Rules Committee Ranking Member Rep. Tom Cole (R-Okla.) has said he thinks that’s exactly what will happen. He told the Federal News Network, “[I]f any of you think you’re going to break Mitch McConnell on this, good luck with that. … I suspect in a week or so we’ll back here again with a bill … many people on my side of the aisle will [support].”
Of course, one week is a lot of time when the government has only eight days of funding remaining before it shuts down.
Meanwhile … Infrastructure
While Congress tries to wrap up the CR/debt ceiling increase, House members are looking forward to (or dreading) a September 27 vote on the Senate-passed, $1.2 trillion bipartisan infrastructure bill. House Minority Leader Steny Hoyer (D-Md.) has confirmed the House will cast this vote even though the larger, $3.5 trillion budget reconciliation bill that progressive Democrats want is not yet ready for consideration.
As readers might recall, House Speaker Nancy Pelosi (D-Calif.) agreed to the September 27 deadline in August when moderate House members were threatening to oppose any budget and spending-related legislation unless Democratic leaders separated the fate of the $1.2 trillion infrastructure bill from Senate Budget Committee Chair Bernie Sanders’ (I-Vt.) budget resolution that included $3.5 trillion in budget reconciliation instructions.
Speaker Pelosi agreed, but that angered other Democrats. The House Progressive Caucus, which is more than 90 lawmakers strong, wants these two bills to be considered together. More than half of the caucus has said they will vote against the $1.2 trillion infrastructure bill unless lawmakers wait until the $3.5 trillion package is ready for a vote.
Speaker Pelosi and the White House are working overtime to keep Democrats united. According to The Hill, just yesterday:
Speaker Pelosi met with Progressive Caucus Chair Pramila Jayapal (D-Wash.). It didn’t work. Immediately after the meeting, Rep. Jayapal reiterated that half of the Caucus would vote against the Senate-passed measure unless it is re-paired with Sen. Sanders’ bill. As a resolute, Rep. Jayapal has been summoned to the White House for a meeting with the President today.
Top White House staff met with leaders from the moderate New Democrat Coalition who have threatened to vote against the $3.5 trillion budget reconciliation bill.
In a meeting with all House Democrats, veteran lawmaker Rep. Jan Schakowsky (D-Ill.) tied the fate of the infrastructure bill to next year’s congressional midterm elections. Rep. Schakowsky said, “We have to have pretty much unanimous support … The consequences of anything other than total unity are damaging not only this year, at this moment, but looking ahead to the elections next year.”
Meanwhile, things are no better in the Senate.
Sen. Kyrsten Sinema (D-Ariz.) told White House officials last weekend that she will vote against the $3.5 trillion bill if the House doesn’t pass the $1.2 trillion infrastructure bill next week. Sen. Joe Manchin (D-W.V.) has said he wants Congress to take a “strategic pause” and not consider the reconciliation until 2022. (Sen. Manchin, a consummate political operator, knows that this outcome effectively would kill the Sen. Sanders’ bill.)
As a reminder, Democrats can afford to lose not a single vote in the Senate and only three votes in the House to get a bill enacted through reconciliation.
House leaders have few options for how to proceed. They can stick to their commitment to vote on the infrastructure bill by September 27 and rely on Republicans to get it to the finish line. But if the infrastructure bill succeeds, it gives House moderates even less reason to support Sen. Sanders’ budget reconciliation bill, which no Republicans will support.
Alternatively, House leaders could try to convince moderate members to delay consideration of the infrastructure bill. That will be a tough pill for those lawmakers to swallow — especially if Sens. Sinema and Manchin will block the $3.5 trillion budget bill anyway. This path doesn’t make victory any more certain.
What Speaker Pelosi really needs is a fairy godmother with a glass slipper.
Instead, there is just another plate of must-pass legislation waiting for her.
“A Train Wreck” To-Do List
As if all that we have described is not daunting enough, September 30 also brings with it the expiration of several key federal programs, including:
The National Flood Insurance Program, which provides aid to home and business owners in flood-prone areas;
Temporary Assistance for Needy Families, which provides income support to families struggling with poverty;
Pandemic-related family and medical leave, which allowed people to take off work if they or a loved one is sick with COVID-19;
Pandemic Supplemental Nutrition Assistance Program benefits, which provide food aid to families struggling with poverty; and
The Fixing America’s Surface Transportation (FAST) Act, which authorized spending for highway and transit programs through FY 2020.
Earlier this month, NBC News called the September legislative onslaught “a train wreck.”
While that might be a tad dramatic, the next eight days certainly won’t feel like a fairy tale unless congressional leaders can plot a path forward on these issues.