Happy Thursday! The path to avoiding an unprecedented debt default got a lot clearer today as the Senate took the first step in a bipartisan plan to raise the federal borrowing limit.
Here’s what’s happening.
14 GOP Senators Back Deal to Raise Debt Ceiling
The Senate on Thursday cleared a procedural hurdle necessary to allow Democrats to raise the debt ceiling and avert a potentially catastrophic default through a simple majority vote.
Fourteen Republicans joined all 50 Senate Democrats in advancing a bill to create a one-time, fast-track process for raising the federal government’s borrowing limit, part of an unusual, two-step plan agreed to by Senate Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY). The bill also would prevent cuts to Medicare and other programs.
The Republicans who backed the compromise plan: Besides McConnell, the 13 other Republicans who backed the plan to let Democrats raise the debt ceiling were John Barrasso of Wyoming; Roy Blunt of Missouri; Richard Burr of North Carolina; Susan Collins of Maine; John Cornyn of Texas; Joni Ernst of Iowa; Shelley Moore Capito of West Virginia; Lisa Murkowski of Alaska; Rob Portman of Ohio; Mitt Romney of Utah; John Thune of South Dakota; Thom Tillis of North Carolina and Roger Wicker of Mississippi.
What’s next: A final Senate vote to approve the fast-track process is expected later Thursday or Friday, and the bill would then go to President Biden’s desk. Once Biden signs it into law, Democrats in the House and Senate would be able to pass a separate bill to actually raise the debt limit to a specific dollar amount. That vote is expected early next week, ahead of December 15, the date by which the Treasury Department has said it might not be able to meet its obligations.
"This is the responsible path forward — no brinksmanship, no default on the debt, no risk of another recession," Schumer said on the Senate floor before the procedural vote. "We still have a few more steps to take before we completely resolve this matter, but I'm optimistic that after today's vote, we'll be on a glide path to avoid a catastrophic default."
And Thune, a member of GOP leadership, indicated to reporters that lawmakers are cooperating to be able move ahead, even as some Republicans have criticized McConnell’s deal, warning that it could set a bad precedent for waiving the Senate’s filibuster rule. "I think everybody has an understanding of how this is probably going to end and wants to get it wrapped up in a timely way," Thune said.
How high will the new ceiling be? Democrats haven’t yet revealed the dollar figure for the new debt limit, but it’s reportedly likely to be over $30 trillion, high enough so that lawmakers don’t have to raise it again before the 2022 midterm elections. “One Treasury estimate suggested they would need to raise it by as much as $2.5 trillion to cover that period,” Emily Cochrane reports at The New York Times, citing a person familiar with the preliminary accounting.
Blunt, the Missouri Republican, said the new ceiling “will be a shock to the system for everybody — and anybody in the country who really can grasp a trillion dollars.” He also told reporters that the end result here — Democrats voting on their own to raise the limit — means McConnell is “getting exactly what he wanted,” albeit not necessarily in the way the GOP leader would have preferred.
Raising the debt limit has traditionally been handled in a bipartisan manner, but McConnell pressed Democrats to raise the limit on their own via the reconciliation process they are looking to use to pass their $1.7 trillion social spending and climate plan. Democrats insisted they wouldn’t go that route because it was too cumbersome, time-consuming and risky.
The compromise hammered out this week lets Congress steer clear of a default while still allowing Republicans to vote no on raising the debt limit, helping them to continue their campaign attacks on Democratic spending plans. (Democrats, on the other hand, may get to again campaign as the responsible grown-ups in Congress, though it’s not completely clear how much the American public cares about such things.)
Number of the Day: 184,000
New claims for unemployment benefits hit a 52-year low of 184,000 last week, the Labor Department reported Thursday. “It's further proof that America's jobs recovery is pushing ahead this winter, with employers vying for staff and workers having plenty of jobs to choose from,” says CNN’s Anneken Tappe.
Still, some economists caution that employment data is unusually noisy due to the pandemic, which continues to affect the labor market in powerful ways. In addition, seasonal factors play a major role at the end of the year, and the usual adjustments, based on more settled conditions, may distort the underlying trends. Without those adjustments, jobless claims rose last week by about 64,000.
Joseph Brusuelas, chief economist at the consulting firm RSM, says the report “almost certainly overstates the strength in [the] labor market,” even as the market continues to improve, and that seasonal factors will continue to play a possibly distorting role at least into the first few months of 2022.
Billions in Pandemic Aid, but No Boost for Biden: Poll
During President Biden’s first 10 months in office, the federal government has spent hundreds of billions of dollars providing aid to households amid the Covid pandemic, but according to a new poll, most Americans don’t seem to think the effort made a big difference in their lives, nor does it appear it to be providing the White House with much of a political boost.
The NPR/Marist National survey of 1,172 adults found that while more than 60% of respondents said they received a $1,400 stimulus check, only a quarter of those said the payment helped a lot. Similarly, while 59% said they had received a child tax credit payment, the majority said the money helped only a little, and 20% said it didn’t help at all.
The public’s failure to connect the efforts of Biden and the Democrats with the flow of aid payments, which have had a dramatic effect on poverty reduction, is evident when survey participants were asked about who should get credit for the direct payments provided earlier this year. Just 40% of respondents said Democrats were responsible, and 17% said Republicans should get credit — despite the fact that the legislation that provided those payments was passed in Congress with all Democratic and no Republican votes.
“After pumping billions into the economy during 2021, Biden does not seem to be benefiting despite more Americans supporting the programs than opposing them,” says Lee M. Miringoff of the Marist College Institute for Public Opinion. “Whether it’s a lack of salesmanship or the stubborn pandemic — or both — is a question the White House must tackle going into the 2022 midterms.”
Ratings tumble: At 42%, Biden’s approval ratings remain at an NPR/Marist poll low, tying the result in November, while his disapproval level is now at 51%.
The lack of enthusiasm for Biden appears to carry over to his signature legislative effort, the Build Back Better Act that is still making its way through Congress. While a majority (56%) said they support the infrastructure package that was signed into law last month, just 41% of respondents said they support the Build Back Better bill, while 34% said they do not and 25% were unsure. A plurality (46%) said they doubt the bill would help people like themselves.
One likely factor driving the low levels of support for Biden and his agenda is the surge in inflation in recent months, a problem that now ranks as Americans’ top economic worry. Democrats are “not connecting the dots between concern about inflation and what's happening in Washington, either with the infrastructure bill or Build Back Better,” said poll director Barbara Carvalho, who added that failure to address this concern could be a serious issue for Democrats as they head into an election year.
Tweet of the Day
Anyone who’s covered or followed tax policy and the debate over the SALT deduction should appreciate this from John Buhl of the Tax Policy Center. We feel you, John.
- Democrats Face Race Against the Clock to Extend Soon-Expiring Child Tax Credit Payments – Washington Post
- Amtrak to Congress: Service Cuts Are Coming Over Vaccine Rules – Washington Post
- Biden Commerce Chief Sees Inflation Easing as Supply Crisis Ebbs – Bloomberg
- Biden Team Seeks to Downplay Inflation Data Ahead of Release – Bloomberg
- White House Launches New Branding for Infrastructure Law: 'Building a Better America' – CNN
- Progressives Get Rolled on Pentagon Policy – Politico
- Texas, Florida See Uptick in Obamacare Enrollment – Politico
- More Than 200 Million People in the U.S. Are Now Fully Vaccinated, Though Deaths and Cases Are Still Rising – Washington Post
- Senate Votes to Overturn Biden Vaccine Mandate for Businesses – CNN
- Omicron Four Times More Transmissible Than Delta in New Study – Bloomberg
- The US Is Undercounting COVID Deaths, Researchers Say. Now They Have a Tool to Figure Out Why. – USA Today
- Covid Hospital Admissions Jump in U.S., Led by Northeast States – Bloomberg
- FDA Authorizes Pfizer Covid Booster for 16-, 17-Year-Olds – Politico
- Omicron May Require Fourth Vaccine Dose Sooner Than Expected, Pfizer Says – Washington Post
- Rapid Coronavirus Tests Are Still Hard to Find in Many Places, Despite Biden Vows – Washington Post
Views and Analysis
- Enough Debt-Limit Drama. Republicans Should Be Blocked From Holding the Economy Hostage Again. – Washington Post Editorial Board
- Why Doesn’t the Pentagon Ever Get Asked, “But How Will You Pay for It?” – Alex Shephard, The New Republic
- Why Republicans Need a Childcare Proposal of Their Own – Abby M. McCloskey, Politico
- Backroom Defense Bill Lets Dictators and Kleptocrats Off the Hook – Josh Rogin, Washington Post
- The Biden Economy Is Actually Pretty Good – Karl W. Smith, Bloomberg
- Reasons for Optimism: Omicron, Gas Prices and Inflation – Zachary B. Wolf, CNN
- Why the Biden Presidency Feels Like Such a Disappointment – Corey Robin, New York Times
- No More 99 Cent Pizza: Why Washington Is Getting Worried About Inflation – Jeanna Smialek, New York Times
- Biden’s Billions for Homelessness Will Be Wasted Unless Used Wisely – Hugh Hewitt, Washington Post
- Biden Promised to Reverse Trump's Health Policies. He's Done That -- Mostly. – Rachel Roubein, Washington Post
- The Infectious Disease Expert Who Warned Us 800,000 Americans Would Die of Covid-19 – Peter Bergen, CNN
- Even Mild Omicron Could Create Severe Chaos – Tyler Cowen, Bloomberg
- For the Elderly, Complacency Could Be a Killer – Zeynep Tufekci, New York Times
- I’m Furious at the Unvaccinated – Charles M. Blow, New York Times
- What Data Shows About Vaccine Supply and Demand in the Most Vulnerable Places – Keith Collins and Josh Holder, New York Times