House passes debt ceiling suspension, which is doomed in the Senate

October 01, 2021: -On Wednesday, the House passed a bill to suspend the U.S. debt ceiling as the country barrels toward a first-ever default with no clear solution in sight.

Republicans sink the plan in the Senate. The GOP has opposed any effort to raise the borrowing limit and intends to make Democrats address it as part of their sprawling investment in social programs and climate policy.

Treasury Secretary Janet Yellen said lawmakers the U.S. will run out of ways to pay its bills around October 18. Suppose Congress fails to suspend or raise the debt limit before the deadline. In that case, lawmakers risk a default that could cost millions of jobs, jeopardize government benefits and crash the financial markets.

The House passed the debt ceiling suspension in a 219-212 vote. The Democrats, except for Reps. Jared Golden of Maine and Kurt Schrader of Oregon supported it, and every Republican but Rep. Adam Kinzinger of Illinois opposed it.

House Speaker Nancy Pelosi, D-Calif., wrote that the chamber would “move forward to honor its responsibility to protect the American economy and American families from the catastrophe of a default by passing legislation to suspend the debt limit.”

But as the bill is set to fail in the Senate, it is not clear how Democrats will avoid default.

The party is aiming to head off two separate crises this week. On Thursday, the deadline to pass a funding bill before the government shuts down.

The Senate could vote on a short-term appropriations plan Thursday that would fund the government until early December. It would then move to the House for approval, where it is expected to pass.

On Monday, that still leaves Congress grappling with the debt ceiling.

Republicans have shot down two other Democratic efforts to address the issue. GOP senators blocked a bill that would have funded the government into December, and it also suspended the borrowing ceiling until December 2022.

Republicans insist Democrats should increase the limit on their own, leading Senate Majority Leader Chuck Schumer, D-N.Y., introducing a motion that allows the Senate to hike the ceiling with a simple majority. On Monday, it needed unanimous consent, and Minority Leader Mitch McConnell, R-Ky., blocked it.

Republicans want to tie the debt ceiling increase to Democrats’ massive legislation as they make their counterparts’ taxing and spending proposals a central plank of their 2022 midterm election strategy. The GOP banks on Democrats blame the U.S. defaults because they control the White House and Congress.

However, raising the debt ceiling does not authorize future spending, and the U.S. will not pay its current obligations if it does not increase or suspend the limit.

According to the Treasury, Congress has raised or suspended the ceiling 78 times since 1960, and it most recently did so in 2019. Avoiding default usually comes with little drama, though a 2011 fight over the debt limit and budget deficits contributed to Standard & Poor’s downgrading the U.S. credit that rates for the first time.