The Debt Limit Deal
As the Bipartisan Infrastructure Bill and the Build Back Better Act slip into the legislative background, the debate over the debt limit takes center stage. The past few weeks have seen discussions on the topic, but it all came to a head this week as a deal to increase the debt limit until December 3rd 2021 has been made.
Talks between Senate Majority leader Chuck Schumer and Senate Minority Leader Mitch McConnell began early this week with a proposal from Senator McConnell to raise the debt limit a specified amount until December. According to an anonymous Senate aide, the debt ceiling would be increased by $480 billion over that time period. While this temporary fix will work for a limited amount of time, the deal would still require Congress to act on the debt limit later this year.
Republicans insist that Democrats must include the debt ceiling increase in their proposed budget reconciliation bill, the Build Back Better Act, in order for it to be raised. Senator McConnell also stated that if Senate Democrats were to drop the proposed budget reconciliation bill altogether, increasing the debt limit would be something both parties could work together on. Democrats believe that the debt limit should be suspended or raised through a bipartisan effort as it has in previous years. This leaves Democrats with two options: wait and see if the Republicans will work to a bipartisan solution or change the chamber’s filibuster rule to allow for a simple majority vote. The second option of the two is unlikely to happen as it lacks complete support with Senate Democrats, along with mixed messages from President Biden.
We will likely see a vote on the debt limit deal by the end of the day today, but it remains to be seen what the next step will be. We’ll be following along on this subject and will keep you up to date with relevant updates. If you have any questions or concerns, please email Jeffrey.Brooks@arlaw.com or Kate.Reitz@arlaw.com.