Pelosi pledges to avert shutdown in US as Republicans oppose debt-limit link

US House Speaker Nancy Pelosi speaks to reporters during her weekly news conference on Capitol Hill in Washington, on Sept 23, 2021.
US House Speaker Nancy Pelosi speaks to reporters during her weekly news conference on Capitol Hill in Washington, on Sept 23, 2021.PHOTO: REUTERS

WASHINGTON (BLOOMBERG) - House Speaker Nancy Pelosi signalled Democrats will avert a government shutdown by passing a stopgap spending Bill without a debt ceiling increase in it, amid Republican opposition to linking the two measures.

"Whatever it is, we will have a CR that passes both houses by Sept 30," Pelosi said at a press briefing on Thursday (Sept 23), referring to the so-called continuing resolution Bill that will be needed to fund the federal government at the start of the new fiscal year on Oct 1.

The House passed a stopgap spending measure this week that would keep the government open until Dec 3 and suspend the debt ceiling until Dec 16, 2022.

Republicans, however, are expected to oppose that Bill, which would require 60 votes in the evenly divided Senate.

Pelosi said that the conversation on the debt limit will continue.

It is not yet clear when the US Treasury could be on the brink of a default, adding uncertainty to how quickly Congress needs to act.

Treasury Secretary Janet Yellen has said the government will probably exhaust its ability to avoid breaching the limit at some point in October.

Democrats have plenty of time to use a partisan approach to raise the debt ceiling without Republican votes, Senate Minority Leader Mitch McConnell said, challenging the argument of a senior House Democrat that the clock had likely run out on that option.

Reconciliation timing

McConnell said on the Senate floor on Thursday it would take Democrats "about a week or a little more" to use the so-called budget reconciliation procedure to raise the debt limit. Senate Democrats have so far resisted employing that tactic, saying that the effort should be bipartisan - as it has been in the past.

"This may inconvenient for them, but it is totally possible," McConnell said. "This Democratic government must not manufacture an avoidable crisis."

McConnell's comments challenge House Budget Committee chairman John Yarmuth, who said on Wednesday that Democrats probably do not have enough time to raise the US debt ceiling on their own using the fast-track budget process before the default date.

Democrats are not universally opposed to using the partisan path to raising the debt limit. House Ways and Means Committee chairman Richard Neal said in an interview with CNN he would be open to using reconciliation.

"If we had to do it, I would do that," Neal said, according to CNN. "I mean that the idea that America would default on debt is so far removed from everything I've ever entertained or thought of since I've been here."

Alabama Senator Richard Shelby, the top Republican on the Appropriations Committee, said he expects "at the end of the day" the Senate will pass a stopgap government funding Bill that doesn't have a debt limit increase on it and that Democrats will move the debt-limit increase through reconciliation.

Reconciliation Bills bypass the filibuster, removing the need for GOP votes in the 50-50 Senate, but have required procedures that take time to go through.