With Congressional Democrats backed into a corner over their $3.5 trillion economic stimulus due to infighting within their own ranks, senior party leaders said on Sunday that they will likely need to scale it back in order to reach party consensus.
On Sunday, House Budget Committee Chairman John Yarmuth (D-KY) told "Fox News Sunday" that the bill's top line number "will be somewhat less than $3.5 trillion," adding that Biden's economic agenda will likely drag into October.
On Fox, Budget Cmte chair Yarmuth says social spending bill “will be somewhat less than $3.5 trillion remember that's over 10 years..we're probably going to slip past the September 27 date sometime into into early October would be my best guess.— Chad Pergram (@ChadPergram) September 19, 2021
Yarmuth's warnings were echoed by Rep. James Clyburn, the third-ranking House Democrat, who told CNN's "State of the Union":
"So it may be $3.5 (trillion), it may be really close to that or maybe closer to something else. So I think that we ought to really focus on the American people to think about what takes to get us in a good place and then let the numbers take care of themselves."
We are working hard to finish the Build Back Better act and have a successful vote on the Bipartisan Infrastructure bill by September 27. pic.twitter.com/wWTAl6taGp— James E. Clyburn (@WhipClyburn) September 19, 2021
Clyburn also suggested that a House vote on the $550B infrastructure bill could also be delayed.
As Reuters notes, Democrats are also scrambling to raise the $28 trillion federal debt ceiling - which Clyburn suggested Democrats may be forced to 'go it alone' in order to accomplish (via reconciliation), as Senate GOP leader Mitch McConnell (KY) has said his party won't support the increase - even though the US Treasury has warned that it will exhaust its cash and borrowing capacity in October.
"I'm not fine with that but if that's what it takes, that's what it will take."
Democrats aim to pass the massive spending plan without Republican support under budget reconciliation rules and cannot afford to lose any Democratic votes in the Senate and only three votes in the House.
Moderate Senate Democrats including Joe Manchin and Kyrsten Sinema say $3.5 trillion is too much; Manchin suggests spending less than half that. Meanwhile, some progressives Democrats in the House say they cannot support a bill with lower spending levels aimed at bolstering the middle class.
Clyburn said that "it's going to take some work" to bring Democrats together to support a bill, but added "I believe in our party and our leadership." -Reuters
House Speaker Nancy Pelosi (D-CA) has sought to build leverage within her own party by delaying the House's passage of the $550B infrastructure bill until the $3.5 trillion package is advanced, however it looks like they're going to blow past their the Sept. 27 deadline. While Yarmuth says the infrastructure bill could still pass, and Pelosi could maintain her leverage by sitting on it before sending to Biden for his signature.
"She can hold on to that bill for a while. So there's some flexibility in terms of how we mesh the two mandates," said Yarmouth, who advocates folding the debt ceiling hike into a normal appropriations measure, but "I don't think that decision has been made yet. We have several options for raising the debt ceiling, which is absolutely mandatory."
Meanwhile, are we feeling a little anxious? T-bills are getting kinky, while US Credit Default Swaps have received sudden interest after months of decline.