The House approved a bill on Tuesday that will briefly lift the debt ceiling until about December 3, 2021 (the same day the current continuing resolution funding the federal government expires). The bill increases the Treasury Department’s borrowing authority by $480B to nearly $28.9T. President Biden is expected to sign the bill into law.
Bipartisan $1.2T Infrastructure Investment and Jobs Act (H.R. 3684) (Infrastructure)
$3.5T Build Back Better Budget Act (Budget Reconciliation)
House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) want to send a budget reconciliation package and an infrastructure bill to the President’s desk before November. However, they are no way near reaching a deal on budget reconciliation within their own caucus even on the topline spending number. Progressives are pushing for $3.5T or more, while moderates in the party have suggested $1.5T is a more appropriate topline figure. President Biden has suggested a compromise of $2T. Without a compromise on the overall amount, the rest of the details for the reconciliation package can’t be ironed out. Once an overall spending level is agreed on, Progressives will have to determine what social spending or climate programs they are amenable to cutting to get to that spending level. Another option is to trim the duration of the programs instead of cutting them. However, the New Democratic Coalition (the House’s biggest moderate caucus) is arguing that a smaller package should focus on long-term certainty for a handful of priority programs. It may take until the end of the calendar year for Democrats to reach an agreement within their caucus. If that’s the case, then a longer-term lift of the debt ceiling could be included in a final budget reconciliation bill.
Highway Authorization – October 31, 2021
FY2022 Appropriations Bills – December 3, 2021
Debt Ceiling – Approx. December 3, 2021 (Some forecasters say this latest increase in borrowing authority could allow Treasury to keep paying its bills through the end of the calendar year or even slightly into 2022.)