Biden Signs Bill Raising Debt Limit to $31.4 Trillion

Plus, Dems’ new BBB plan: wait ‘til next year ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey A bit of good news to end your day: Tomorrow is Friday. Here's what you need to know as we wind down the week. Democratic Divisions Delay Biden Spending Bill Until 2022 President Joe Biden and congressional Democrats are adopting the mantra of many a losing sports team: Wait ‘til next year. Acknowledging the increasingly obvious, Senate Democrats are giving up on their push to pass a roughly $2 trillion package of health care, education, climate and tax plans by the end of the year, according to reports. Party leaders had aimed to pass the legislation before heading home for the holidays, but their drive faced multiple obstacles — most prominently, the continued objections of Sen. Joe Manchin (D-WV) to the structure of the legislation and much of its content. But the legislative text of the package and a review of key provisions by the Senate parliamentarian have yet to be completed as well, further complicating efforts to quickly bring the bill to a vote. Manchin has criticized what he and other fiscal hawks see as budget gimmicks in the bill, which makes some programs temporary in order to bring down the official cost of the overall package. But his demand that measures in the bill be funded for 10 years and his insistence that the total spending not exceed $1.75 trillion mean that some key Democratic priorities — like an extension of the party’s expanded child tax credit, which on its own would cost about $1.6 trillion— could be squeezed out of the bill. Why it matters, part 1: The year-end deadline to pass the package was an artificial, self-imposed one — and it’s just the latest in a string of such deadlines that Democrats have blown during a months-long struggle to finalize a crucial plank of their economic agenda. The latest delay has renewed frustrations and among members of the party and risks dissipating any momentum the legislation may have had after the House narrowly passed its version of the bill last month. "We missed an opportunity," Senate Majority Whip Richard Durbin (D-IL) told reporters Thursday, adding that he was "frustrated and disappointed" but not giving up. House progressives, with some exceptions, had agreed to enact a $1.2 trillion bipartisan infrastructure plan, a priority for party centrists, under the premise, or promise, that Biden would deliver the votes needed for the larger social spending and climate plan to get through the Senate. But Biden’s talks with Manchin have failed to win over the West Virginia senator, again bringing Democratic divisions to the fore — and, in some ways, rewinding the intraparty debate over the bill back to where it was months ago. "Some Democrats said that they are far from a resolution on a now-familiar dispute: whether to seize on their rare, narrow and potent majorities afforded them in the last election to pursue aggressive, expensive economic reforms — or reel in their ambitions to assuage the fiscal conservatism of Sen. Joe Manchin III," The Washington Post’s Tony Romm [reports](. That all leaves Biden’s agenda — and Democrats’ 2022 election campaign platform — in serious doubt. Republicans, meanwhile, are rejoicing over Democrats’ inability to come together. "The best Christmas gift Washington could give working families would be putting this bad bill on ice," Senate Minority Leader Mitch McConnell said. Why it matters, part 2: More practically, the delay increases the likelihood that Democrats’ expanded child tax credit, which has been providing monthly payments to some 35 million families since July, could expire at the end of the year. The Internal Revenue Service had advised lawmakers that they would need to extend the credit by December 28 to ensure that the January payments could go out in time. "The delay matters," Sen. Sherrod Brown (D-OH) said, according to [Bloomberg News](. "If we do it in the first weeks of January it makes it a little more challenging for the secretary of the Treasury to get the checks out by Jan. 15." But Brown added, "it’s going to all happen." If it does, it will now have to be in 2022. Biden Signs Bill Raising Debt Ceiling to $31.4 Trillion President Biden on Thursday signed the bill raising the debt ceiling by $2.5 billion, averting what could have been a largely self-imposed economic disaster for the country. "This bill will reassure all the economic markets at home and around the world that we’re going to continue to pay our debts when they are due," Biden said at the White House. With the Senate passing the politically contentious bill Tuesday and the House following suit Wednesday, backed by virtually all Democrats and just one Republican, lawmakers pushed hard up against the deadline of December 15 imposed by Treasury Secretary Janet Yellen, who warned that the country could default on its obligations at any point after that date due to restrictions imposed by the debt limit. The previous debt ceiling of $28.9 trillion has now been lifted to $31.4 trillion. The $2.5 trillion increase is expected to allow the government to operate without threat of default into 2023 — at which point lawmakers will likely go through the whole aggravating process once again. Chart of the Day: A First for Health Insurance We told you yesterday about the unprecedented increase in national health care spending in the U.S. last year, with expenditures rising by nearly 10% to a record $4.1 trillion, according to the Centers for Medicare and Medicaid Services. Larry Levitt of the Kaiser Family Foundation notes an interesting twist in the data: For the first time since at least 1960, expenditures by private health insurance actually fell in 2020, as millions of people cut back on their consumption of services due to Covid-19. "The pandemic bent the cost curve," Levitt [said]( "but not exactly in the way we'd like." Send your feedback to yrosenberg@thefiscaltimes.com. And please tell your friends they can [sign up here]( for their own copy of this newsletter. News - [Democrats Are Forced to Regroup as Biden’s Signature Spending Bill Stalls]( – NPR - [In Senate That ‘Sucks,’ Dems Wait for Biden’s Word]( – Politico - [Biden Economic Bill Pushed to 2022 Amid Democrats’ Discord]( – Bloomberg - [All Eyes in Washington and West Virginia Are on Manchin as Child Tax Credit, Spending Bill Hang in Balance]( – Washington Post - [Chamber of Commerce Launches Ads Targeting Manchin, Hoping to Kill Build Back Better]( – Politico - [Cori Bush Slams 'Alarming' Delay on Dems' Spending Bill, Says It Shouldn't Be 'at the Feet' of Joe Manchin]( – Fox Business - [Biden Speaks With Senators on Voting Rights as Democrats Move to Prioritize Legislation on the Issue]( – Washington Post - [Family Separations: Settlement Talks With Biden Administration Have Broken Down, Attorneys Say]( – Washington Post - [Biden Warns of Winter of 'Severe Illness and Death' for Unvaccinated Due to Omicron]( – CNN - [As Omicron Spreads, Health Experts Push for Mask Mandates. But Few States Have One]( – NPR - [Biden Administration Details Push to Finally Rid the Nation of Millions of Lead Pipes]( – Washington Post Views and Analysis - [How Joe Manchin and Republicans Are Wrecking Our Most Important Debates]( – Paul Waldman, Washington Post - [Congress Approved $778 Billion for the Pentagon. That Means We Can Afford Build Back Better.]( – Rev. Dr. William J. Barber II et al, Politico - [Build Back Better Would Make Biden’s Annus Horribilis Even Worse]( – George F. Will, Washington Post - [Democrats Need to Reframe Their Agenda]( – Jennifer Rubin, Washington Post - [The EPA’s Rule to Replace Lead Pipes Shows How Broken Congress Is]( – Henry Olsen, Washington Post - [The Year of Inflation Infamy]( – Paul Krugman, New York Times - [Federal Reserve Makes a Welcome Pivot But Has More to Do]( – Mohamed A. El-Erian, Bloomberg - [The 1937 Project]( – David Dayen, American Prospect - [Omicron Could Be Milder — or a Disaster. Don’t Wait to Find Out.]( – Washington Post Editorial Board - [Medicaid Enrollment Churn and Implications for Continuous Coverage Policies]( – Bradley Corallo et al, Kaiser Family Foundation Copyright © 2020 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](