Time for Triage — Avoiding a Shutdown Comes First
Author: Greg Valliere
September 28, 2021
Time for Triage: Avoiding a Shutdown Comes First
September 28, 2021
REALITY BEGAN TO SINK IN YESTERDAY, as Washington’s warring factions realized that compromise is inevitable, starting with a bill to keep the government open when the fiscal year starts on Oct. 1.
THE MEDIA PORTRAYED A SENATE VOTE LAST NIGHT as a sign that a shutdown is very much in play, but we have a different take. By abandoning the provision to raise the debt ceiling, Democrats can get a funding package immediately from the GOP, keeping the government open.
SO THE DEMOCRATS ARE GRUDGINGLY leaning toward withdrawing the debt ceiling provision, kicking the can down the road, keeping the government open well into the fall.
THAT WOULD GIVE EVERYONE SOME BREATHING ROOM, as more compromises take shape on the debt ceiling and the two massive infrastructure bills.
THE PLAYER TO WATCH, AS USUAL, IS NANCY PELOSI: She understands the ultimate realpolitik — how many votes do you have? She will broker a bill in the next 48 hours to avoid a shutdown, and she will infuriate the Progressive left by separating the $1 trillion basic infrastructure bill from the bloated $3.5 trillion social spending package.
THE FAR LEFT THOUGHT THEY HAD A DEAL: No infrastructure bill unless it’s accompanied by the social bill. But the latter has encountered just enough opposition from moderate Democrats to bog it down, possibly for weeks. So Pelosi is thinking: why not pass the first bill and come back later in the fall with another attempt to win the second one?
THAT STRATEGY COULD DELIVER A BADLY NEEDED WIN for Joe Biden, who could get his $1 trillion measure. Biden is in a deep slump and needs an infrastructure victory.
PELOSI THUS MIGHT BRING THE $1 TRILLION BILL to the House floor as early as this Thursday, daring the Progressives to vote against it. Biden and Pelosi will promise to move later on the second bill, but its passage is far from guaranteed because moderates will oppose it.
MAYBE A SKINNY social spending package — costing a mere $1.5 trillion — could pass later this fall, once there’s a consensus on huge issues such as the composition of tax hikes and whether the package is credibly paid for.
A SKINNY PACKAGE could move via the budget reconciliation process, which theoretically would include a debt ceiling hike that the Democrats eventually will have to own. The debt ceiling is a serious issue, but as reported yesterday, the Federal Reserve could employ its trillions to deal with a default threat.
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