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Left to right, Senate Minority Whip John Thune of South Dakota, Senate Minority Leader Mitch McConnell of Kentucky, and Senate Republican Policy Committee Chairman Roy Blunt of Missouri. Kevin Dietsch / Getty Images

  • Senate Republicans have blocked a move to avoid a federal default and fund the government.

  • This ensures that the political spirit will intensify beyond the debt ceiling, bringing the United States closer to potential economic chaos.

  • Democrats could lift the ceiling on their own, but there is no guarantee of success.

  • See more stories on the Insider business page.

Senate Republicans led by Minority Leader Mitch McConnell on Monday blocked a measure that would have avoided both a default and a government shutdown, bringing the United States closer to a financial meltdown as Republicans escalate their efforts to derail President Joe Biden’s national agenda.

The 50 GOP senators voted against House-approved legislation that suspends the debt ceiling until December 2022 and funds the government until December 3, thus strengthening the federal government’s ability to pay its disrupted bills Congress for months. The measure also included $ 28 billion in disaster assistance funding for communities ravaged by a recent pair of hurricanes, as well as assistance with the resettlement of Afghan refugees in the United States.

The failed vote was 48-50, and the bill failed to cross the 60-vote threshold to end the debate known as filibuster. After the vote, Senate Majority Leader Chuck Schumer assaulted Senate Republicans, claiming they “voted to lead our country straight to government shutdown and the first default in our country’s history. “.

McConnell has insisted since June that Republicans would not sign an increase in the debt ceiling – or an increase in the amount the U.S. government can pay off its bills – even though he said in September that it was necessary to do it because “America must never fail.” Republicans argue Democrats can take unilateral action to raise the cap and fund their party line’s spending this year from the stimulus bill and a $ 3.5 trillion social spending program.

“There is no confusion over who runs this country, [Democrats] have both chambers, ”Republican Senator Kevin Cramer of North Dakota told Insider last week. Many Republicans, including McConnell, say they can support an interim bill to fund the government after September 30, but only if it doesn’t include an increase in the debt ceiling.

Democrats attacked the GOP’s justification for opposing the lifting of the debt ceiling, arguing that both sides are responsible for piling up on federal debt with emergency spending during the pandemic and spending increases domestic affairs under the Trump administration. Some Democratic lawmakers are proposing to remove the debt ceiling entirely.

The debt ceiling confrontation evokes a previous confrontation between Republicans and the Obama administration in 2011 that caused turmoil in financial markets and led to a very first deterioration in American credit. Now Republicans are voting against raising the debt ceiling in an attempt to force Democrats to raise the debt ceiling themselves, even though Republicans have voted to raise it three times under administration Trump.

It’s not immediately clear whether Democrats will push for an increase in the debt ceiling using reconciliation, the same process they use to bypass Republicans in their social spending plan. The tactic allows Democrats to pass their package with a simple majority vote.

But it could take a long time and last for weeks with no guarantee Democrats can achieve it due to the strict guidelines governing reconciliation.

“We’ve never done one to create a debt limit fallout, it’s not like it’s a well-understood concept,” Charlie Ellsworth, former Democratic Senate budget employee and now, told Insider. partner of Pioneer Public Affairs. “There are a lot of things that need to be worked out for this path to be pursued. “

The consequences of a possible default could be immense and affect the entire US economy. The Bipartisan Policy Center predicts that the Treasury will run out of liquidity to meet the government’s financial obligations between October 15 and November 4.

After that, millions of older people could face a crash on Social Security checks and American soldiers could miss scheduled paychecks. The White House has warned of possible cuts in federal funding for safety net programs like Medicaid.

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