Democrats sitting in Congress are planning to try and suspend the current federal government debt ceiling through 2022.
Back in 2019, Congress voted to suspend the debt ceiling, which is a statute that prevents the federal government from assuming a certain level of the national debt, out until August of 2021. This past July, Congress tried and failed to pass a vote aimed at continuing the suspension or just raise the debt ceiling itself. This forced the hand of Janet Yellen, the Treasury Secretary, to take “extraordinary measures” to try and fund the expenses of the federal government.
This past weekend, Yellen sounded the alarm that the government could begin to fail to make its payments as soon as October if Congress failed to take any action at all.
During all this, Republican leadership has taken to forcing Democrats to own the higher debt ceiling along with their $3.5 trillion social spending plans that the Democrats plan to pass through the circumventing the Senate filibuster through budget reconciliation.
“I can’t imagine a single Republican in this environment that we’re in now — this free-for-all for taxes and spending — to vote to raise the debt limit,” stated Mitch McConnel (R-KY), the Senate Minority Leader, as part of an interview. “I think the answer is they need to put it in the reconciliation bill.”
In an announcement made on Monday, House Speaker Nancy Pelosi (D-CA) stated that Congress would now be funding Congress for a few months more and once again try to suspend the debt ceiling.
“This week, the House of Representatives will pass legislation to fund the government through December of this year to avoid a needless government shutdown that would harm American families and our economic recovery,” she stated as part of a joint statement alongside Senate Majority Leader Chuck Schumer (D-NY). “Both Republicans and Democrats have priorities they want to see addressed in the regular order appropriations process for Fiscal Year 2022, and an extension of government funding through December will provide an appropriate amount of time for that bipartisan, bicameral process to come to completion.”
“The legislation to avoid a government shutdown will also include a suspension of the debt limit through December 2022 to once again meet our obligations and protect the full faith and credit of the United States,” continued the statement.
Earlier this year, one of the “Big Three:” rating agencies on Wall Street, Fitch Ratings, put out a “Negative Outlook” on the creditworthiness of the United States as a result of the expanding federal debt. Despite the United States keeping its “AAA” rating, Fitch went on to state that the outlook “reflects ongoing risks to the public finances and debt trajectory.”
Currently, the national debt is $28.8 trillion.