The $3.5 trillion budget resolution released by Senate Democrats on Monday does not include a provision to increase the debt ceiling, which Republicans had previously warned they likely wouldn’t support.
Democrats may use reconciliation to pass their budget resolution and spending plan without having to secure any Republican votes as the GOP continue to withhold their support. If a measure raising the debt ceiling is not added to this budget plan, it could lead to a showdown over the debt ceiling in the fall.
Senate Majority Leader Chuck Schumer, D-N.Y., noted in a letter to his Democrat colleagues that he was sending the text of the plan in order to help them “prepare for consideration of the Budget Resolution on the Senate floor and the writing of the reconciliation bill this summer.”
He added, “by making education, health care, child care, and housing more affordable, we can give tens of millions of families a leg up. By making further investments in infrastructure, we can create tens of thousands of good-paying jobs. And by finally tackling climate change, we can spare our country and our planet the most devastating effects of global warming.”
Senate Minority Leader Mitch McConnell, R-Ky., said last month that he “can’t imagine there will be a single Republican voting to raise the debt ceiling” due to how much the country spend during the COVID-19 pandemic.
However, Treasury Secretary Janet Yellen warned Congress on Monday that failing to raise the debt ceiling will “cause irreparable harm” to the country’s economy, noting in a statement that “increasing or suspending the debt limit does not increase government spending, nor does it authorize spending for future budget proposals; it simply allows Treasury to pay for previously enacted expenditures.”
Yellen added that “the vast majority of the debt subject to the debt limit was accrued prior to the Administration taking office. This is a shared responsibility, and I urge Congress to come together on a bipartisan basis as it has in the past to protect the full faith and credit of the United States.”