House to vote on debt ceiling this week amid political impasse
Democrats could link debt limit vote to stopgap spending bill
Rep. John Yarmuth: 'Absolutely mandatory' to raise debt ceiling
John Yarmuth, D-Ky., says he would like 'to see a clean vote on a debt ceiling so that Republicans actually have to go on the record' and 'not mix it with a funding measure.'
The House will vote this week on a measure to suspend the nation's $28 trillion debt ceiling before the federal government runs out of cash to pay its bills in October.
In a letter to colleagues on Friday, House Majority Leader Steny Hoyer, D-Md., said Democrats will vote on the debt limit as well as a must-pass stopgap spending bill to keep the government operating past Sept. 30. It's unclear whether the two measures will be linked.
The House Rules Committee is meeting Monday to draft a continuing resolution to extend government funding through early December. Decoupling government funding from the debt limit could help ensure the stopgap bill's passage, with more Republicans willing to support a temporary funding bill that includes billions in disaster aid to help recovery from Hurricane Ida.
At the same time, Democrats may lose some political leverage if they do not tether the two measures together, which could force GOP lawmakers to go on the record and vote against the stopgap spending bill, forcing a government shutdown.
Democrats say they're still undecided on the matter.
"I don't think that decision's been made yet," House Budget Chair John Yarmuth, D-Ky., said during an interview on "Fox News Sunday." "We have several options for raising the debt ceiling, which is absolutely mandatory."
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Treasury Secretary Janet Yellen has repeatedly warned that without congressional action, the U.S. could default on its debt sometime in October, potentially triggering an "economic catastrophe." But lawmakers are engaged in a game of brinkmanship over the debt: Senate Minority Leader Mitch McConnell, R-Ky., last week rejected an appeal from Yellen to suspend the cap on how much money the government can borrow.
"Let’s be clear: With a Democratic President, a Democratic House, and a Democratic Senate, Democrats have every tool they need to raise the debt limit. It is their sole responsibility," McConnell tweeted last week. "Republicans will not facilitate another reckless, partisan taxing and spending spree."
If the U.S. failed to raise or suspend the debt limit, it would eventually have to temporarily default on some of its obligations, which could have serious and negative economic implications. Interest rates would likely spike, and demand for Treasurys would drop; even the threat of default can cause borrowing costs to increase.
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"The U.S. has never defaulted. Not once," Yellen wrote in a recent Wall Street Journal op-ed. "Doing so would likely precipitate a historic financial crisis that would compound the damage of the continuing public health emergency."