October 15, 2021
President Biden Signs Temporary Increase in the Debt Limit
Now that Congress and the Administration have agreed to both a temporary increase in the debt limit and a continued extension of the current federal budget through early December, Washington settled into what will now be weeks if not months of high stakes negotiations to strike a final deal on the budget reconciliation and infrastructure packages.
The Debt Ceiling is Temporarily Raised. On Tuesday, the House passed a $480 billion increase in the country’s borrowing limit. On Thursday, President Biden signed the bill raising the debt limit until about early December. The debt ceiling was expected to be reached this coming Monday. However, early December will now be an especially pressure-filled time in Washington, with the continuing resolution slated to lapse on December 3.
Reconciliation Negotiations Remain in Limbo. Yesterday, news leaked that the White House is “nearing the end of its patience on reconciliation talks… the president is ready to get this done.” While it has been tirelessly reported that Sens. Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV) hold the keys to the reconciliation package, a savvy article published by NPR reported that Sinema and Manchin’s priorities are wildly different. One key difference is that Manchin supports allowing Medicare to negotiate directly with drug companies, while Sinema does not. While the prevailing total of the package will likely be in the ballpark of $1.5 trillion, it is unclear as to what the final bill will look like.
The Infrastructure Package. The one-month extension of the surface transportation bill lapses on October 31. Since President Biden and House Democrats have made it very clear that the bipartisan infrastructure package won’t pass unless it is paired with a reconciliation bill at the same time, it remains unclear as to what next steps are on dealing with surface transportation reauthorization.
Backup at the Ports of Los Angeles and Long Beach. There has been substantial gridlock at Los Angeles ports amid supply chain issues. The situation has become so dire that on Wednesday, President Biden announced expanded hours at both ports. This backup potentially has major implications. This is both major news and something to keep an eye on moving forward, especially as the economy has been plagued by increasing inflation.