Senate is searching for a deal to avoid a government shutdown

October 01, 2021: -The Senate has reached a deal to avoid a government shutdown, Majority Leader Chuck Schumer said late Wednesday.

The New York Democrat said he had scheduled a vote on the stopgap measure for Thursday morning. According to Schumer, the bill would keep the government running into early December, and the deal would still need to pass the House.

Federal funding will lapse if Congress fails to pass an appropriations plan before midnight Thursday.

The proposal would include money for hurricane relief and Afghan refugee resettlement.

“We approve this measure quickly and send it to the House so it can reach the desk of the president before funding expires midnight tomorrow,” Schumer said on Wednesday. “With so many critical issues to address, the last thing the American people need is a government shutdown.”

A lapse in funding could lead to federal worker layoffs and a reduction in services. The Biden administration’s Office of Management and Budget has sent guidance for shutdown to agencies ahead of the funding deadline.

If lawmakers keep the government running, they only prevent one looming crisis. Treasury Secretary Janet Yellen has told Congress the U.S. will run out of ways to pay its bills around October 18 if lawmakers do not hike or suspend the debt limit, which raises the prospect of a first-ever default that could wreck the U.S. economy.

Government funds and the debt ceiling are separate issues. Increasing the borrowing limit does not authorize future spending and allows the Treasury to cover its current obligations.

Democrats, who control chambers of Congress, tried to head off both crises in one swoop this week. On Monday, the House passed a bill to fund the government and suspend the debt ceiling, but Republicans blocked it in the Senate. The GOP has opposed efforts to raise the debt limit.

Once Congress approves an appropriations bill, Democrats will have to find a way to avoid default on their own. On Tuesday, Republicans, who appear set on boxing their counterparts into surging the ceiling as part of their massive investment in social programs and climate policy, blocked a motion that would have allowed Democrats to hike the debt limit with a majority vote.

On Wednesday, Schumer said trying to increase the ceiling through the budget reconciliation process would put Congress in “uncharted waters.”

“It is hazardous and could well lead us to default even if only one senator wanted that to happen,” he said. “So you can’t do it through this route.”