Members of the House returned to Washington during recess Tuesday, where they passed a bill that would temporarily raise the debt ceiling and push the potential of default back to December. Treasury Secretary Janet Yellen had said default could happen as early as Oct. 18.
If signed by President Joe Biden, the bill would raise the debt ceiling by $480 billion. The increase would allow the government to continue paying its debts through Dec. 3. The Senate passed the bill last week after Senate Minority Leader Mitch McConnell broke a standoff between Democrats and Republicans.
But come December, Sen. McConnell said he won’t help again. In a letter sent Friday to President Biden, McConnell said Democrats in the House and Senate will have to handle the next debt ceiling vote on their own using reconciliation.
“Your lieutenants on Capitol Hill now have the time they claimed they lacked to address the debt ceiling through standalone reconciliation, and all the tools to do it,” McConnell said in the letter. “They cannot invent another crisis and ask for my help.”
Reconciliation allows legislation to pass the Senate with 51 votes rather than the 60 that’s typically required. Recently, it was most notably used to pass the larger part of President Biden’s economic agenda. McConnell has connected the spending boost required for Biden’s agenda with the nation’s rising debt load. This, despite the fact that the debt ceiling will have to be increased or suspended regardless of whether Biden’s agenda makes it into law.
If the House or Senate does not vote to raise or suspend the debt ceiling in December, there would be immense fallout. Routine government payments to Social Security beneficiaries, disabled veterans, and active-duty military personnel would be called into question, and the global markets would also be severely impacted.
“Global financial markets and the economy would be upended, and even if resolved quickly, Americans would pay for this default for generations,” a recent report from Moody’s Analytics warned.