Tag Archives: “budget reconciliation”

Biden says Republican stonewalling on debt ceiling risks U.S. default

By Susan Cornwell, Richard Cowan and Jarrett Renshaw

WASHINGTON (Reuters) -President Joe Biden said on Monday the federal government could breach its $28.4 trillion debt limit in a historic default unless Republicans join Democrats in voting to raise it in the two next weeks.

Senate Republicans, led by Minority Leader Mitch McConnell, have twice in recent weeks blocked action to raise the debt ceiling – saying they do want action but will not help. Republicans say Democrats can use a parliamentary maneuver known as budget reconciliation to act alone. Top Democrats have rejected that approach.

“Raising the debt limit comes down to paying what we already owe … not anything new,” Biden said at a White House news conference.

Asked if he could guarantee the United States won’t breach the debt limit, the president answered: “No I can’t. That’s up to Mitch McConnell.” He said he intended to speak with McConnell about the matter.

In a high-stakes standoff over parliamentary maneuvers. McConnell for months has been saying that Democrats should use a process called “budget reconciliation” to get around the Senate’s filibuster rule, which requires 60 of 100 members to agree to pass most legislation. Senate Majority Leader Chuck Schumer, a Democrat, has rejected that approach and Biden on Monday pleaded not to use the filibuster to block action.

“Just get out of the way,” Biden told Republicans. “If you don’t want to help save the country, get out of the way so you don’t destroy it.”

Late last month the U.S. House of Representatives passed and sent to the Senate a bill to suspend the limit on Treasury borrowing through the end of 2022.

Schumer on Monday said that later this week the Senate would vote for a third time on a measure to suspend the debt limit.

Treasury Secretary Janet Yellen last week warned lawmakers that the United States government was close to exhausting its federal borrowing capabilities by about Oct. 18.

Failure to act could have catastrophic economic consequences. Moody’s last month warned that it could cause a nearly 4% decline in economic activity, the loss of almost 6 million jobs, an unemployment rate of close to 9%, a sell-off in stocks that could wipe out $15 trillion in household wealth and a spike in interest rates on mortgages, consumer loans and business debts.

Democrats note that they voted to raise the debt limit during Republican Donald Trump’s administration even though they opposed deep tax cuts that added to the debt.

Biden said the United States racked up nearly $8 trillion in new debt over Trump’s four years in office, more than one quarter of the entire debt outstanding.

“Republicans in Congress raised the debt three times” under Trump, he said, with Democratic support.

STOCKS SLIDE

Concerns over the debt ceiling contributed to Monday’s drop in the stock market. Wall Street’s main indexes tumbled on Monday as investors shifted out of technology stocks in the face of rising Treasury yields, with concerns about U.S.-China trade, Taiwan and the debt ceiling in the forefront.

McConnell stuck to his guns in remarks to the Senate, and in an open letter to Biden on Monday.

“The majority needs to stop sleepwalking toward yet another preventable crisis. Democrats need to tackle the debt limit,” McConnell said on the Senate floor.

In a letter to Biden, McConnell said that the Democrats do not need Republican cooperation to pass a bill to raise the debt ceiling. Democrats have had nearly three months notice from Republicans about their position on the matter, McConnell wrote.

McConnell is known for standing his ground once he takes a controversial position. For example, in 2016 he refused to allow a Senate hearing on then-President Barack Obama’s nomination of Merrick Garland to a seat on the Supreme Court – holding the seat open until after Trump assumed office nearly a year later.

Schumer said the Senate will have to stay in session through the weekend and possibly into a planned recess next week if no progress is made on raising the debt limit.

Last week, the Senate’s parliamentarian ruled that Schumer could use the reconciliation process to bring a debt limit bill to the Senate floor, according to a source familiar with the ruling.

According to the parliamentarian, doing so would not jeopardize Democrats’ efforts to bring a second bill to the Senate floor under reconciliation. That is the multitrillion-dollar bill embracing Biden’s domestic agenda expanding social services and addressing climate change that Democrats are developing.

(Reporting by Susan Cornwell, Richard Cowan and Jarrett Renshaw; additional reporting by David Morgan, Jeff Mason, Steve Holland, Diane Bartz and Eric Beech; Editing by Scott Malone, Mark Porter and Grant McCool)

Manchin concerned about “grave consequences” of U.S. Senate’s $3.5 trln spending plan

By Makini Brice and Susan Cornwell

WASHINGTON (Reuters) -U.S. Democratic Senator Joe Manchin on Wednesday said he had serious concerns about Senate Democrats’ planned $3.5 trillion spending plan, potentially gumming up efforts to move ahead with President Joe Biden’s top priorities.

The Democrat-led Senate approved a blueprint for the plan early on Wednesday morning in a 50-49 vote along party lines, after lawmakers sparred over the need for huge spending to fight climate change and poverty.

Now Biden’s Democratic Party embarks on weeks of debates about priorities including universal preschool, affordable housing and climate-friendly technologies, with progressives like Representative Alexandria Ocasio-Cortez seeking robust action on climate change and moderates including Senator Kyrsten Sinema expressing concern about the bill’s price tag.

Manchin, a moderate who often acts as a bridge between his party and the Republicans, said in a statement that he was worried about potentially “grave consequences” for the nation’s debt as well as the country’s ability to respond to other potential crises.

The vote followed about 14-1/2 hours of debate that started right after the Senate on Tuesday passed a $1 trillion infrastructure bill in a bipartisan 69-30 vote, proposing to make the nation’s biggest investment in decades in roads, bridges, airports and waterways.

“It’s been quite a night. We still have a ways to go, but we’ve taken a giant step forward to transforming America. This is the most significant piece of legislation that’s been considered in decades,” Democratic Senate Majority Leader Chuck Schumer told reporters after the budget resolution passed.

The bills have been a top priority for Biden, who has sought to enact sweeping changes during a time when Democrats hold fear loss of legislative control in the looming 2022 elections.

The Democrats plan to push the package through over the next few months, using a process called “budget reconciliation,” which allows them to pass legislation with a simple majority vote.

House Majority Leader Steny Hoyer, a Democrat, said the House would return from its summer break early on Aug. 23 to consider the budget resolution.

Republicans have railed against the $3.5 trillion spending plan. Senate Republican leader Mitch McConnell, who voted for the $1 trillion infrastructure bill, called the larger proposal “radical.”

Energy Secretary Jennifer Granholm told CNN on Wednesday morning that the Biden administration will push for both pieces of legislation and leave Congress to decide the order in which they are considered.

Granholm added that “there’s a lot to like” in the spending bill for Manchin, Sinema and other moderates, saying the hefty cost would be covered with taxes on people earning more than $400,000 a year and on corporations.

DEBT CEILING LOOMS

Dozens of Republican senators also signed a pledge not to vote to raise the nation’s borrowing capability when it is exhausted in the autumn to try to curtail Democrats’ spending plans.

“They (Democrats) shouldn’t be expecting Republicans to raise the debt ceiling to accommodate their deficit spending,” Senator Ron Johnson, a Republican who circulated the pledge, told the Wall Street Journal.

Failure to increase or suspend the statutory debt limit – now at $28.5 trillion – could trigger a federal government shutdown or a debt default.

Treasury Secretary Janet Yellen this week urged Congress to raise the debt limit in a bipartisan vote. On Tuesday, Yellen also endorsed moving forward with the larger spending package, saying the $1 trillion infrastructure plan should have a sequel.

UNCERTAIN FUTURE

On Tuesday, Biden lauded the 19 Republicans who voted for the bipartisan $1 trillion infrastructure measure. “Here on this bill, we’ve proven that we can still come together to do big things – important things – for the American people,” he said.

House Speaker Nancy Pelosi has said her chamber will not vote on the infrastructure bill or the larger spending package until both are delivered, which will require the Democratic leadership to hold its narrow majorities in Congress together to get the legislation to Biden’s desk.

Leading House progressive Democrats said on Tuesday that most progressives would not vote for the bipartisan infrastructure bill until the Senate also passes a “robust” second spending measure. That was in contrast to more moderate House Democrats, who want a quick vote on the infrastructure bill.

Polls show the drive to upgrade America’s infrastructure, hammered out over months by senators from both parties, is broadly popular with the public. The bill includes $550 billion in new spending, as well as $450 billion in previously approved infrastructure investment.

Democrats will begin crafting the reconciliation package for a vote on passage after they return from their summer break in September.

Following the budget resolution vote, Schumer filed a cloture petition on a compromise voting bill for the chamber to vote on upon its return in September. A previous attempt to overhaul electoral laws with sweeping legislation known as the “For the People Act” was blocked in June.

(Reporting by Susan Cornwell and Makini Brice, additional reporting by David Morgan, Susan Heavey and Lisa Lambert; Editing by Scott Malone, Shri Navaratnam, Kim Coghill and Hugh Lawson)

U.S. Senate passes bipartisan $1 trillion infrastructure bill

By Richard Cowan and David Morgan

WASHINGTON (Reuters) -The U.S. Senate on Tuesday passed a $1 trillion infrastructure package that is a top priority for U.S. President Joe Biden, a bipartisan victory that could provide the nation’s biggest investment in decades in roads, bridges, airports and waterways.

The vote was 69-30 in the 100-seat chamber, with 19 Republicans voting yes. Immediately after that vote concluded, Senators pushed ahead with a follow-up $3.5 trillion spending package that Democrats plan to pass without Republican votes.

Polls show that the drive to upgrade America’s infrastructure, hammered out over months by a bipartisan group of senators over months of negotiations, is broadly popular with the public.

The bill still has to go to the House of Representatives and the spirit of cooperation in Congress that led to Tuesday’s vote will likely prove fleeting.

“Big news, folks: The Bipartisan Infrastructure Deal has officially passed the Senate,” Biden said on Twitter on Tuesday. “I hope Congress will send it to my desk as soon as possible so we can continue our work of building back better.”

Senate Majority Leader Chuck Schumer expects also to have the votes to pass the budget resolution laying the groundwork for $3.5 trillion to be spent on healthcare, climate change and other Biden priorities that Democrats will almost certainly have to pass over Republican objections in a maneuver known as “budget reconciliation.”

“When the Senate is run with an open hand rather than a closed fist senators can accomplish big things,” Schumer said shortly before the voting began.

Once that resolution is adopted, Democrats will begin crafting the reconciliation package for a vote on passage after they return from their summer break in September.

Democratic House Speaker Nancy Pelosi has said repeatedly that her chamber will not take up either bill until she has both in hand, meaning that months of work remain before Tuesday’s measure would go to Biden’s desk to be signed into law.

“The House will continue to work with the Senate to ensure that our priorities for the people are included in the final infrastructure and reconciliation packages,” Pelosi said after the vote.

The non-partisan Congressional Budget Office on Thursday said the infrastructure bill would increase federal budget deficits by $256 billion over 10 years — an assessment rejected by negotiators who said the CBO was undercounting how much revenue it would generate.

After working for two consecutive weekends on the infrastructure bill, a “vote-a-rama” session that could run late into the evening will be in store for the Senate.

Senate Minority Leader Mitch McConnell, who voted for the infrastructure bill, signaled that Republicans would try to use the voting sessions to pick off support from moderate Democrats for what he called a “radical” larger spending package that would create a permanent welfare state and usher in the largest peacetime tax hike in U.S. history.

“Every single senator will be going on record over and over and over,” McConnell added. “We will debate, and we will vote, and we will stand up, and we will be counted, and the people of this country will know exactly which senators fought for them.”

The budget plan would provide various Senate committees with top-line spending levels for a wide range of federal initiatives, including helping the elderly get home healthcare and more families afford early childhood education.

It also would provide tuition-free community college and foster major investments in programs to significantly reduce carbon emissions blamed for climate change.

Later, Senate committees would have to fill in the details for scores of federal programs.

The budget blueprint was formally unveiled on Monday, the same day a U.N. climate panel warned that global warming was reaching emergency levels, or what U.N. Secretary-General Antonio Guterres described as a “code red for humanity.”

Senate passage of the infrastructure bill and the budget plan would clear the way for it to begin a month-long summer break.

When Congress returns in September, it will not only debate the large investment measures but have to fund government activities for the fiscal year beginning on Oct. 1, increase Washington’s borrowing authority and possibly try to pass a voting reform bill.

(Reporting by Richard Cowan and David Morgan; Editing by Scott Malone and Alistair Bell)

U.S. Senate Democrats unveil details of $3.5 trln follow-up bill

By Richard Cowan

WASHINGTON (Reuters) -Democrats in the U.S. Senate on Monday released some details of the $3.5 trillion bill addressing social spending and immigration that they aim to push through after passing the bipartisan $1 trillion infrastructure bill.

The first details of the larger bill — a key goal for progressive Democrats — showed that it would provide tax incentives for “clean” manufacturing, make community college free for two years and provide a pathway to citizenship for millions of immigrant workers.

The first bill, which sits atop Democratic President Joe Biden’s domestic agenda and includes $550 billion in new spending on roads, bridges and internet access, cleared an important procedural hurdle late on Sunday when the Senate voted 69-28 in support of the provisions contained in the 2,702-page plan.

The Senate also voted 68-29 to limit further debate to a maximum of 30 hours, setting up a potential vote on passage early on Tuesday on the package, the result of months of bipartisan negotiations.

The massive spending bill is popular among many lawmakers in both parties because of the federal dollars it would deliver to their home states. Polls also show that Americans at large are supportive of it.

But the moment of bipartisanship that produced it was likely to be fleeting as Democrats prepare to turn their attention next to the larger bill, which they aim to pass over Republican objections using a parliamentary maneuver called “budget reconciliation.”

Democrats are aiming to debate and pass this nonbinding resolution in coming days, which would serve as a framework for more detailed, binding legislation later this year. Republicans have strenuously objected to the size and cost of the follow-up package.

PARLIAMENTARIAN’S POWER

The ambitious goals of this budget plan will be reviewed by the Senate parliamentarian, who has the power to strip out provisions found to be at odds with Senate rules. The full Senate, however, could vote to over-rule such decisions.

In a letter to senators, Senate Majority Leader Chuck Schumer said the budget plan is aimed at “restoring the middle class” by making education, child care and housing more affordable.

A separate Democratic memo says the $3.5 trillion costs would be fully paid for by a combination of tax increases, savings in federal health care programs and projected long-term economic growth.

The latter claim is debated by many economists who often disagree over the accuracy of the economic impact stemming from new policies enacted by Washington.

There would be no tax increases for those making under $400,000 a year, Democrats said.

The tax increases, which already have been previewed by the Biden administration and Senate Democrats, would hit high-income earners and would be coupled with beefed-up IRS tax enforcement. The measure also calls for a “carbon polluter import fee.”

The plan also called for extending a new, expanded child tax credit that progressives wanted to make permanent. And it would provide “relief” to tax filers bumping up against a cap on a state and local tax deduction tightened by a 2017 Republican-backed tax law.

Still unclear is whether Democrats will attach a debt limit increase to the reconciliation bill that will be developed in coming weeks or will seek another way of raising Washington’s nearly exhausted borrowing authority.

Treasury Secretary Janet Yellen on Monday again urged Congress to take quick action in a bipartisan way.

WEEKEND WORK

The Senate worked for a second straight weekend to advance the infrastructure bill aimed at repairing, expanding and improving roads, bridges, waterworks and schools, while also expanding high-speed internet service in underserved areas.

During debate on Sunday, Democratic Senator Catherine Cortez Masto of Nevada noted the boost for her state’s mining industry, saying new money would strengthen “a critical mineral and battery supply chain that supplies key components of cellphones and laptops, electric vehicles, solar panels and more.”

The Senate had been scheduled to begin a four-week summer recess, but instead found itself in session on both Saturday and Sunday, which saw little more than occasional speeches before the procedural votes.

Even with passage of the bill this week, senators will still not be able to go back to their home states or jump onto foreign trips popular during long recesses.

That is because Schumer aims to launch immediately into debate of the budget framework providing the outlines for the $3.5 trillion “human infrastructure” bill that Democrats want to begin advancing in September.

Passing any major legislation is difficult given the 50-50 split between Democrats and Republicans in the Senate, with Democrats claiming a majority thanks to Vice President Kamala Harris’ tie-breaking vote. Democrats hold a razor-thin majority in the House of Representatives.

If the $1 trillion bill is approved by the Senate, as expected, the House would still have to debate and vote on it, sometime after it returns in late September from its summer break.

(Reporting by Richard Cowan; Editing by Scott Malone, Jonathan Oatis and Alistair Bell)