U.S. House poised to vote on bill to speed passage of debt limit increase

WASHINGTON (Reuters) -The U.S. House of Representatives on Tuesday plans to vote on legislation easing the way for Congress to pass an increase in the $28.9 trillion limit on federal borrowing authority and avoid a looming default on the nation’s debt.

FILE PHOTO: U.S. Senate Majority Leader Chuck Schumer (D-NY) speaks to reporters following the Senate Democrats weekly policy lunch at the U.S. Capitol in Washington, U.S., November 30, 2021. REUTERS/Elizabeth Frantz/Files

“This evening, we will pass legislation” making it easier for the Senate to raise the debt limit with a simple majority of its 100 members, House Speaker Nancy Pelosi said in a statement.

“We must address the debt limit to stave off an unnecessary and catastrophic drop of trillions of dollars of GDP and a devastating downgrade to our credit rating,” Pelosi said.

Normally, most legislation needs support of at least 60 senators to clear procedural hurdles. Senate Republican Leader Mitch McConnell sent a clear message that his party will help facilitate a debt limit increase even though its members aim to vote against the actual bill implementing it.

“I think this is in the best interest of the country by avoiding default,” McConnell told reporters, adding, “We’ll be voting on it Thursday,” as he expressed confidence in its passage.

The dollar amount for the proposed new statutory debt limit still must be determined, but it was expected to be enough to carry the Treasury Department through next November’s congressional elections, according to Democratic Senator Elizabeth Warren.

The breakthrough strategy, brokered by Democratic and Republican congressional leaders following months of political infighting, would establish a two-step approach for raising the Treasury Department’s borrowing authority.

First, both chambers would vote on the bill on the expedited Senate procedures. Senate passage will need a supermajority of at least 60 and thus requires Republican cooperation.

A second bill actually raising the debt limit under the expedited procedure would then be debated for a maximum of 10 hours in the Senate, instead of the open-ended debate that can delay or kill most Senate bills.

Under the plan, the debt limit increase would have to be considered in the Senate no later than Jan. 15. Senate passage would clear the way for a final vote by the House.

The expedited procedure for the debt limit was included in a bill to postpone Medicare cuts that would otherwise take place starting Jan. 1. That is a bill most lawmakers would not want to delay or kill.

Since Democratic President Joe Biden started his term in January, Republicans have been sounding alarms about the Treasury Department’s credit card tab.

Republican lawmakers voiced barely any complaints about escalating the federal debt when they passed a massive tax cut under former President Donald Trump. Democrats opposed that tax cut but both parties worked together to approve debt limit increases.

Senate Majority Leader Chuck Schumer early on Tuesday signaled progress in breaking the deadlock over the debt limit.

“We have made good progress on this issue and I am optimistic that we will be able to prevent the awful prospect of the U.S. defaulting on its sovereign debt for the first time ever,” Schumer said in a speech to the Senate.

By facilitating passage of a debt limit increase but not actually voting to implement one, Republicans would give themselves ammunition to attack Democrats in the 2022 congressional election campaigns for raising the $28.9 trillion debt limit.

Republicans are pinning the need for the debt limit hike largely on President Joe Biden’s $1.75 trillion domestic investment bill known as “Build Back Better” that Senate Democrats hope to pass in coming weeks, following enactment early this year of the $1.9 trillion “American Rescue Plan” to further boost the economy during the COVID-19 pandemic.

Democrats say most or all of Build Back Better spending will be offset by tax increases on the wealthy and that the current need to increase the debt limit largely is to cover past spending that Trump and many Republicans supported.

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