It’s possible Congress will fail to pass an infrastructure bill. It does, however, have an exit ramp. On Wednesday, Republicans and Democrats seemed to reach an agreement on the debt limit.
Lawmakers’ stances are sometimes so hardened they can’t get out of them. They’re caught on a path to oblivion, with the spotlights of a crisis slamming into them.
What Happens Next?
As a result, everyone looks for a way out. The debt ceiling was an example of this. The partisanship over the debt limit and the Democrats’ efforts to authorize trillions in social expenditure became too entrenched on both sides. However, the reality of a nationwide economic downturn loomed.
Majority Leader Chuck Schumer stated, “too many conservatives seem pleased about this driving us to the brink of default. A few of them (Republicans) want us to default.”
.@PressSec on the debt ceiling: “There is still an opportunity for Republicans to join us and be adults in the room and ensure that people have confidence in the economic security and their own retirement savings.” https://t.co/tFJuEu0NTW pic.twitter.com/IE7KthKyBO
— The Hill (@thehill) October 7, 2021
Schumer scheduled a vote on Wednesday afternoon to resolve a filibuster on a package that would extend the debt ceiling limit until December 2022. Liberals were ready to swallow their pride and vote to end the filibuster.
Republicans, on the other hand, have pledged to filibuster. Even if all 50 Democrats voted yes, the Senate would fall short of the 60-vote threshold needed to end the filibuster.
There have been warnings about what might occur if the national government’s debt cap is breached. Secretary of the Treasury Janet Yellen cautioned the administration will be unable to make healthcare payments to Americans because it will be unable to borrow to cover the shortfall.
Everyone is Avoiding the Topic
When questioned on Tuesday if he spoke to any large bankers or Wall Street giants about the GOP waiting out the budget deficit fight, Senate Minority Leader Mitch McConnell didn’t answer. The investment world was expected to slam Washington if politicians stumbled into a debt ceiling debate.
— The Daily Wire (@realDailyWire) October 7, 2021
Even during the Great Recession, the House of Representatives notoriously failed to adopt a financial bailout program in the fall of 2008. Later, the Dow fell to a then-record low of 777 points.
“They’re not stupid enough to not approve this,” the market reasoned. “What’s more, is they made the mistake of failing to pass it,” TMJ Institutional Services’ Jim Iuorio said.
“If Washington does not act, I believe the market will punish Congress quickly, rapidly, and brutally.” Worries began to spread in Congress that credit agencies might degrade the US’ credibility well before October 18, the date by which the Treasury estimates the US will run out of money.
Although Congress raised the debt ceiling ahead of the date, Standard & Poor’s degraded the US in 2011. According to S&P, Congress added too much controversy to the procedure. That didn’t help foster confidence in America’s political system.
There’s no telling what could possibly be coming next.