WASHINGTON, D.C. (NBC) – The federal government did not shut down Thursday after the House and Senate approved a deal to extend government funding through December 3. Less certain: whether Democrats will be able to advance two key parts of President Biden’s agenda.
It’s a defining moment for the president, who, in hopes of saving his legislative priorities, is desperately working to broker a deal between moderates and progressives in his own party.
The agreement does not stave off another looming crisis: a potential default on the nation’s debt, something U.S. Treasury Secretary called “catastrophic for the economy” if Congress doesn’t raise the country’s borrowing limit by October 18th.
House Democrats already approved a measure to do that, but it’s unclear if the Senate will do the same.
Republicans are trying to force Democrats to increase the debt limit alone in protest of their multi-trillion-dollar spending plans.
The Democrats’ agenda is now in real jeopardy.
House Speaker Nancy Pelosi I still planning to hold a vote Thursday on the trillion-dollar infrastructure bill that passed the Senate with bipartisan support. But opposition from progressive Democrats is mounting as a deal remains elusive on a larger package, funneling up to $3.5 trillion into healthcare, education, and climate programs.
Key moderate Senator Joe Manchin revealed publicly Thursday his topline number is much lower: $1.5 trillion. “I think there’s many ways to get where they want to,” he said. “Just not everything at one time.”
It’s a high-stakes standoff within the Democratic party with President Biden’s top legislative priorities hanging in the balance.
Looking ahead to the upcoming debt ceiling fight Treasury Secretary Yellen said going into default would mean an interruption in social security payments and paychecks for soldiers and a likely spike in interest rates.
If Congress does act in time, Yellen said she has confidence the economy will keep recovering and return to full employment next year.