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What To Know About The High-Stakes Congressional Standoff


The U.S. government is facing the possibility of having to shut down in just a few days. And talks on Capitol Hill to avoid that are, well, they're complicated. Joining us now to try and shed some light on the situation is NPR congressional correspondent Kelsey Snell. Kelsey, thanks so much for joining us.

KELSEY SNELL, BYLINE: Of course. Thanks for having me.

MARTIN: To start with, let's get a handle on all the deadlines that are coming up. It just seems very confusing.

SNELL: It is confusing because there are basically four different deadlines that have all managed to converge. The first one is the government running out of money. They will run out of funding at the end of the day on Thursday, when the fiscal year ends on September 30. There is bipartisan agreement on a plan to extend the current spending levels through December 3. But a bill that would do that is almost certainly doomed to fail when it comes up for a vote in the Senate on Monday. Now, it already passed the House, but Democrats chose to tie that government funding to a completely different deadline, and that's increasing the debt limit.

MARTIN: And for people who might not know, would you just remind us, what exactly is the debt limit?

SNELL: Right. The debt limit is a - it's something that Congress sets. They have to vote every time that they get close to it. And it is how much the government can borrow to pay for spending commitments. The Treasury Department estimates that the government may hit that limit in this case and won't be able to borrow more money or make more payments on existing debt sometime in mid-October. Republicans are refusing to support that part of the bill, and they want Democrats to cut it out. They want to just vote on government funding. But, you know, the other two deadlines that have absolutely nothing to do with that and have everything to do with Democrats' plans to pass trillions of dollars in new spending.

MARTIN: So where do all these negotiations stand?

SNELL: Well, Democrats say they're close to a deal on a spending bill that could be as much as $3.5 trillion. Now, this is that bigger spending bill that includes much of President Biden's domestic agenda, not the spending bill to keep the government open. We have to, you know, kind of keep these two things separate. Now, there have been intense negotiations as Democrats try to figure out how to satisfy progressives who want big ambitious policies and moderates who worry about the price tag. Democrats are now looking at a big menu of taxes and fees and other revenue raisers that they can tap to make sure that the whole bill, however big it ends up being, doesn't add to the deficit.

MARTIN: So I think people who've been following this will remember that this conflict over the bigger spending package is tied to this internal fight among Democrats. But what's happening with the debt limit and spending?

SNELL: You know, Democrats say Republicans have a responsibility to vote for the debt limit because Republicans helped drive up the debt when they voted with Democrats to approve things like COVID relief that passed under former President Trump. Republicans, you know, they generally ignore that argument. And they are not talking about past debt. Republicans want to say that this is about new spending. They say it's about fiscal responsibility. Democrats say Republicans are simply being obstructionists. And they say that Republicans are violating norms of working together to handle debt increases. I think it's important to remember that this is something that happens frequently. It's happened 17 times in the past 20 years, so it's almost an annual thing.

MARTIN: So you've laid out the substance of the problem, but there are obviously political calculations involved. What are the political calculations for each party?

SNELL: For Democrats, the Monday vote in the Senate is a bit of an opportunity to put individual Republicans on the record and to demonstrate that they feel Republicans are refusing to cooperate on something that was once considered a political norm. For Republicans, they want to force Democrats to own the possibility of default by including it in a partisan spending bill that they know is troubled by Democrats' divisions within their own party. So adding debt limit to an already fraught negotiation puts even more focus on those internal divisions and more pressure on Democrats.

MARTIN: But this is serious. I mean, the fact is there are economic repercussions to this - right? - getting close to that debt limit. How do you think this gets resolved?

SNELL: Yeah. It's really hard to see how it gets resolved right now. You know, both the debt limit and the spending deadlines are very real. They have real consequences. There was a similar standoff 10 years ago. And at the time, the credit agency Standard & Poor's downgraded the nation's credit worthiness even though they didn't actually get to the brink on the debt limit. If that happened again, it could have huge economic ripples like crashing 401(k) values and higher interest rates on mortgages and just general chaos in an already fragile economy.

MARTIN: That was NPR congressional correspondent Kelsey Snell. Kelsey, thank you.

SNELL: Thanks for having me. Transcript provided by NPR, Copyright NPR.

Kelsey Snell is a Congressional correspondent for NPR. She has covered Congress since 2010 for outlets including The Washington Post, Politico and National Journal. She has covered elections and Congress with a reporting specialty in budget, tax and economic policy. She has a graduate degree in journalism from the Medill School of Journalism at Northwestern University in Evanston, Ill. and an undergraduate degree in political science from DePaul University in Chicago.