The Looming Government Shutdown and Debt Default ‘Cliffs’

Another wild September in our nation’s capital. Photo-Illustration: Intelligencer; Photo: Getty Images

Even for an institution prone to let obligations pile up like the dirty laundry of procrastinating adolescents, Congress has outdone itself this year in creating an autumn logjam. There is, of course, House passage of the trillion-dollar infrastructure bill already cleared by the Senate, along with the multi-trillion dollar budget reconciliation bill to which it is inextricably linked, which must be enacted in both Houses. There is no immediate deadline for these all-important items, though Speaker Nancy Pelosi has promised to take up the infrastructure bill by September 27, which means steady progress first on the immensely complicated reconciliation bill so that one doesn’t pass while the other falls apart. There’s also a defense authorization bill due by the end of the month. And Pelosi wants a vote on a national abortion rights bill asap, so that it has time to go over to the Senate and die to a Republican filibuster.

The thing that must happen by the end of September is some action on appropriations to keep the federal government open, presumably by a stopgap “continuing resolution,” since Congress isn’t getting any of the 13 regular FY 2022 appropriations bills done when the new fiscal year begins on October 1. House Majority Leader Steny Hoyer has now told Members to expect a vote on a stopgap bill the week of September 20, extending current appropriations until December.

According to a previous decision by congressional Democrats, the plan is to connect an increase or suspension in the public debt limit to appropriations, nestling the unpopular debt measure into the must-pass spending bill. Since Treasury Secretary Janet Yellen told the world earlier this week that action on the debt limit had to happen before the end of October at the latest, that means the stopgap bill had better include it. Otherwise the federal government will default on its obligations and the world financial system will collapse, which would be unpleasant.

The implications of these scheduling decisions is that Congress will be at the edge of not one but two “cliffs” as the end of the month nears: one involves the government shutdown that will occur if appropriations are not extended, and the other involves a debt default that will occur if that breached limit is not addressed then or very soon afterwards. Trouble is, Senate Republicans are vowing not to provide any votes for a debt limit increase or extension so long as Democrats persist in godless socialism in the rest of their agenda, and without bipartisan support the measure would succumb to a filibuster. So Democrats are calling their bluff. If Republicans stare them down and refuse to do the right thing then the country could fall into the double abyss of a non-functioning government and an imperiled financial system. You know, alongside a COVID-19 pandemic, economic jitters, continuing threats of insurrection, and the legislative legacy of the Biden presidency.

What Republicans want Democrats to do instead of going to the brink on spending and debt is to put a debt limit measure into the aforementioned unresolved budget reconciliation bill, which if all goes as planned will be enacted on strict party-line votes in both congressional chambers. This would let Republicans claim they had virtuously opposed both socialism and the socialist debt, while letting the stopgap spending bill slip through and avoiding a financial meltdown, too. But even if they wanted to go along with this GOP scheme, which they don’t, the timing is off; the reconciliation bills may not be ready to pass by the time Yellen signals that her department’s “extraordinary measures” of money-juggling have run out and calamity awaits. It was to avoid this kind of mess that motivated both parties in Congress along with the Trump administration to agree on a two-year don’t-rock-the-boat budget deal in 2019. Unfortunately the deal expired on August 1, and now it’s time again for brinkmanship. It won’t be fun unless you like to watch middle-aged (and older) pols in suits attempt high-wire acts without a net.

Government Shutdown and Debt Default ‘Cliffs’ Loom Ahead