Hoyer: House will vote to avoid debt default, shutdown next week

Decoupling government funding from the debt limit would leave many Republicans more willing to back a short-term government funding bill that includes billions of dollars in disaster aid for hurricane-battered red states across the southeast, which was requested by President Joe Biden.

That detachment of debt from government funding would rob Democrats of a potential messaging opportunity against the recalcitrant GOP. Democratic leaders have been mulling whether to tie the two together, thus daring Republicans to go on the record against a plan to avoid a shutdown and debt default while offering disaster aid.

But some Republicans have indicated their willingness to support just a stopgap that includes hurricane and flood relief. Democrats just have to drop their debt limit push, GOP lawmakers say, ceding a huge leverage point and pushing a massive legislative headache into next month. The stopgap funding bill set for action next week is set to run through December.

Treasury Secretary Janet Yellen has implored Congress to act on the debt ceiling, with her agency set to run out of cash as soon as next month. She has warned that waiting until the last minute could “irreparable damage to the U.S. economy.” Other experts have estimated that lawmakers may have until mid-November to act.

Republicans insist that Democrats can raise the debt limit on their own through reconciliation, or the special budget process that they’re using to pass trillions of dollars in party priorities without GOP votes. But moderate Democrats aren’t likely to support a debt ceiling hike and the White House has said it wants to pursue a bipartisan solution, accusing Republicans of playing chicken with a typically bipartisan issue that could have calamitous consequences.

A cap on the nation’s ability to borrow money was reinstated on Aug. 1. Treasury Department has since implemented a number of workarounds to keep paying the government’s bills on time. Once those measures are exhausted, financial markets could be thrown into chaos and the government’s credit rating could tank, among other unparalleled consequences.