At the last minute, the US Congress wants to avoid the imminent partial stalemate of government business. The Senate, Thursday, will initially vote on transitional funding for the government through the beginning of December, the House of Representatives announced on Wednesday evening. A vote in the House of Representatives could be made shortly thereafter, in order to eventually put the budget regulation into effect shortly before the crucial midnight deadline. A vote on a major infrastructure package initiated by US President Joe Biden is also scheduled to take place in the House of Representatives on Thursday. It is unclear whether this will actually happen.
Biden Definitely Wants To Prevent Shutdown
The background to this is a tough internal struggle between Democrats for the second, larger investment package that Biden has pushed. The Democrat is fighting to implement what may be the most important project of his presidency.
The new fiscal year in the United States begins on Friday. If no budgetary regulation has been adopted by then, parts of the government will be “shut down”. This means that some state employees will have to take compulsory leave or work temporarily without pay. These “closures” occur more often in the United States. But Biden certainly wants to prevent that from happening to him.
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The US threatens to default from mid-October
Last week, the House of Representatives voted with Democrats to approve a temporary funding arrangement for the government. However, Senate Republicans resisted because it also provided for the debt ceiling to be suspended for the time being – which they reject. In the end, Democrats had to separate the two questions and could count on Republican approval in order to prevent a “shutdown.”
The much bigger problem with the debt ceiling is still there today. Without an increase or suspension of that limit by Congress, the US government is at risk of defaulting in mid-October, according to Treasury Secretary Janet Yellen. Last time Yellen warned that “America will go bankrupt for the first time in history.” The result is likely to be a “financial crisis and economic recession.” The US economy and financial markets around the world are threatened with “irreparable damage”.
Pelosi: Republican blockade could lead to economic disaster
Pelosi and Senate Majority Leader Chuck Schumer also warned of economic disaster and accused Republicans of risking serious damage from their blockade. Raising or suspending the debt ceiling is usually a bipartisan issue.
The House, by Democratic votes, passed a separate bill Wednesday night that suspends the debt ceiling through December. The Senate will also have to approve this, which is currently unlikely given Republican resistance.
$550 billion in infrastructure
In addition to the bipartisan fight, violent internal disagreements between Democrats also make the president difficult. With an increasingly turbulent series of talks and negotiations, he is trying to advance two major projects during his term in Congress: a large-scale package of investments in the country’s infrastructure and a second massive package of social investments.
The infrastructure package, which will modernize roads, bridges and other transportation and energy networks in the United States, passed the Senate in August after long negotiations — with the support of Republicans. Another congressional chamber’s final vote is still missing. About $550 billion in new infrastructure investment is scheduled over the next few years. In total, including previously budgeted funds, the package is worth more than a trillion dollars.
Even some Democrats criticize the spending hike
The second package provides a significant expansion of social benefits. For example, Biden wants to invest more in education and childcare, give families more support and tax breaks, and allocate money to fight the climate crisis. To date, this package is worth $3.5 trillion, also spread over several years. It will be funded by tax increases for higher earners and more consistent collection of taxes owed.
Since Republicans don’t want to keep up, Democrats plan to introduce this second package through Congress themselves through a special parliamentary procedure. However, they only have a narrow majority in both houses, and their plans are also controversial. Some moderate Democrats criticize high spending, while some progressive Democrats would like more. The latter threatened to disrupt the infrastructure package unless the second, larger package was also secured. Enthusiastic negotiations continued for days to organize a majority for both. But it doesn’t look like it’s on the horizon yet.
The infrastructure package is Biden’s legacy
Pelosi had announced a vote on the infrastructure package on Thursday. In light of the muddled situation, it is unclear if it will remain that way – and what will happen to both packages. For Biden, they are projects central to his presidency, to some extent his legacy.
In the midst of this tense situation, members of Congress and the President took a break Wednesday evening (local time) – they played baseball. On the eve of an important day in Parliament, the US capital hosts a traditional Congressional baseball game, where Democratic and Republican lawmakers compete against each other for charity. Biden made an impromptu visit to the game and spoke with players on both sides.