US lawmakers are expected to vote to raise the government borrowing limit on Tuesday, in an eleventh-hour effort to avert default before the end of the year.
The votes in the Senate and House of Representatives to lift the debt ceiling come one day ahead of a December 15 deadline set by Janet Yellen, US Treasury secretary, who has for weeks warned about the risks of a government default.
Democrats and Republicans have for months been at odds over the debt ceiling, with the GOP insisting that President Joe Biden’s party “go it alone” in lifting the borrowing limit, while blaming Democrats for reckless spending.
But congressional leaders from the two parties reached a breakthrough last week when a critical mass of Republicans agreed to a one-time rule change allowing Democrats to raise the debt ceiling using a simple majority, rather than being required to clear a 60-vote filibuster threshold in the Senate. The deal sharply divided Republicans, with just 14 GOP lawmakers signing up to the procedural change.
No Republicans are expected to vote to raise the debt limit when the matter comes before the Senate on Tuesday. The measure will need to clear the upper chamber of Congress, which Democrats control by the narrowest of margins, before a vote in the Democrat-held House later in the day. The bill will have to be signed into law by Biden to take effect.
In recent weeks, some market participants had sought to limit their exposure to US government debt maturing around a possible default deadline. But two strong auctions last week for Treasury bills set to mature in four and eight weeks suggested any investor angst over debt ceiling-related volatility had subsided.
Tuesday’s votes are the latest in a long list of hurdles Congress needs to clear before the Christmas holiday. Earlier in the month, lawmakers acted to avert a government shutdown, voting to fund the government through early next year and delaying another face-off over the federal budget. Members of Congress are also expected to vote as soon as this week on a separate measure to continue funding the US military.
It remains unclear whether Democrats will be able to push through Biden’s ambitious $1.75tn Build Back Better social spending bill. Democratic leaders have insisted they can pass the measure before the end of the year, but their optimism has been dashed by a small number of objectors from within their own party, particularly Joe Manchin, West Virginia senator.
Additional reporting by Colby Smith in Washington