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PRESENTED BY

BY JOHN BRESNAHAN, ANNA PALMER AND JAKE SHERMAN
WITH MAX COHEN AND CHRISTIAN HALL

THE TOP

The Senate passed a short-term extension of the debt limit on Thursday by a 50-48 party line vote, staving off a potential fiscal and economic crisis until at least Dec. 3. This came after Senate Minority Leader Mitch McConnell and 10 other Republicans voted to break a GOP filibuster of the measure. That action ended a weeks-long standoff on the debt limit, but it also set up another massive showdown later this fall between McConnell and Senate Majority Leader Chuck Schumer.

There was some last-minute drama, as well. Schumer went to the floor and harshly criticized Republicans for provoking the crisis. Schumer won this round of his never-ending battle with McConnell, and he made sure everyone knew it. But Republicans — and Sen. Joe Manchin (D-W.Va.) — didn’t like the tone of Schumer’s remarks. Senate Minority Whip John Thune complained personally to Schumer on the floor, while Sens. Mike Rounds (R-S.D.) and Mitt Romney (R-Utah) complained to reporters. 

Manchin told Schumer the speech was “fucking stupid,” according to four sources. Then Manchin complained to reporters too. The incident doesn’t really signify anything, except to show how tense everyone is in the Senate these days. And it’s only going to get worse.

Following the Senate’s action, House Majority Leader Steny Hoyer announced the House would return to Washington on Tuesday to take up the measure.

We expect it to pass. It won’t be pretty. There will be complaints by moderate House Democrats over having to vote for the measure, with at least one more such vote coming later in the year. Moderates wanted only one debt-limit vote in the entire Congress; the House is on track now for at least three. So yeah, they’re gonna grumble.

And let’s also quickly go over the new deadlines Congress faces:

→ Oct. 31: This is the date Speaker Nancy Pelosi set for passing the $1 trillion bipartisan infrastructure bill.

→ Dec. 3: This is the date that government funding runs out and the rough date the Treasury Department will again hit the debt limit. The government funding deadline is set in stone, while the debt-limit deadline can shift depending on the level of inflows and outflows out of Treasury at that time. 

But know this — late November and December are going to be rough. It seems exceedingly unlikely that Republicans will help Democrats with lifting the debt limit again — no matter what Schumer’s world says. Then we’ll really have a default crisis and a government shutdown showdown on our hands.

With all this in mind, keep reading, because we are going to get into our “Five Outstanding Questions.”

OUR FIVE

The Outstanding Questions that will drive D.C. 

1) When will the Democrats’ reconciliation package pass, if it ever does? Senate Majority Leader Chuck Schumer said this week that his goal is to pass the Build Back Better reconciliation package — the multi-trillion dollar centerpiece of President Joe Biden’s legislative agenda — by Oct. 31. This would allow Democrats to approve the reconciliation package and the bipartisan infrastructure bill at the same time.

Yet the chances of that happening seem pretty low. Democrats may have a deal on a “topline” number between the House and Senate by that time, but it’s hard to see them having this legislation fully drafted and scored by CBO by that deadline. Listen to Sen. Bernie Sanders (I-Vt.), chair of the Budget Committee, on Thursday:

“Obviously we want to get it done as quickly as possible. But obviously, this is an enormously complicated and consequential bill. The American people are not calling my office and saying, ‘You gotta do it by Thursday. Or next Monday.’ What they are saying is ‘Make sure we continue to have the $300 payment for our kids. Make sure you can expand Medicare. Make sure you deal with climate [change.]’ This is not a baseball game. This is an enormously consequential piece of legislation.”

So we don’t really expect that reconciliation will be done by Oct. 31. Ok, what about Thanksgiving? Democrats and the White House may have a shot, but it’s still tough. Year end? Maybe more realistic.

Which begs the obvious question of whether the Democrats can get it done at all. Right now, having talked to a lot of Democratic lawmakers and aides this week in both the House and Senate, we’d say the odds may be 50-50. The way the whole bipartisan infrastructure fight went down last week wasn’t a great confidence builder, that’s for sure.

2) How bad is December going to be? The Democrats went into September facing four big issues — government funding, the debt limit, the bipartisan infrastructure bill and reconciliation. They’ve essentially punted on three of them — government funding, infrastructure and the debt limit — and haven’t reached even a topline deal yet on reconciliation by now, despite being at the end of the first week of October.

At this point, Democrats face a combination government-funding plus debt-limit cliff in early December. As we noted before, Senate Minority Leader Mitch McConnell and his colleagues aren’t likely to give them the votes for another debt-limit extension, especially after what happened on the floor yesterday. Yes, it’s petty, but senators don’t easily forget personal slights. Like never.

And McConnell’s allies acknowledge he wants chaos for Democrats and the White House heading into a crucial time on the BBB agenda. A potential government shutdown or debt default will do the trick nicely.

Some Democrats will say, “Well, we faced him down in October on the debt limit and he caved. McConnell will cave again.” We’re not sure that is the right read of the situation, not after McConnell got bashed by some of his own senators over his strategy this week. In McConnell world’s view, he went through the pain of twisting arms once, which makes it unlikely he’ll do it again.

So December could be a very different situation. It may be wise to assume that what happened Thursday will probably not be repeated.

3) Who will win between progressives & moderates? Think about this — Bernie Sanders held a press conference on Wednesday simply to bash Joe Manchin and Kyrsten Sinema. That should tell you how things are going between the two big factions inside the Democratic Party.

Or how about this anecdote from a story by our friend Manu Raju at CNN on the Manchin-Sanders divide:

“Rep. Ro Khanna had a suggestion for President Joe Biden on a private conference call earlier this week: Have Sens. Joe Manchin and Bernie Sanders sit in the same room and try to cut a deal on the Democratic Party’s massive social safety net expansion.

Because once they do, the California Democrat suggested, it would almost certainly satisfy the moderate and liberal wings of the Democratic caucus, which have been battling over the size, scope and details of the plan for months.

But Biden, according to multiple sources in the virtual meeting, told the progressive House Democrats that he’s been in politics a long time — and getting them together in the same room would almost be like ‘homicide.’ The group laughed, as Biden then made a joke about getting into the boxing ring with Khanna himself.”

“Homicide.” We know that Sanders and Manchin have clashed, including getting into a bit of a yelling match over the minimum wage earlier this year, but it’s fascinating to hear the president say this.

Relations between the two Democratic factions are at a low point, that’s clear, especially following Pelosi’s decision to delay the infrastructure vote for another month, which infuriated some moderates. The House left town for a scheduled two-week recess at that point, although that’s being revised now because of the upcoming debt-limit vote on Tuesday.

Progressives have the numbers, and are much louder and more enthusiastic. They’re the real power inside the party. Also, Biden, Pelosi and Schumer have sided with progressives so far this Congress on most issues. But without moderates, there is no Democratic majority. And they’re pretty unhappy right now. 

What happens by the end of October on the bipartisan infrastructure bill will be critical. If Biden’s poll numbers continue to fall, and they get shut out on the infrastructure bill, then moderates may just decide it’s time to save themselves and pull back from the BBB agenda entirely. That’s the great danger for the leadership because then neither initiative may pass. That would, of course, infuriate progressives and spur a further backlash from the left, adding more fuel to the ideological fire.

4) How long can Manchin and Sinema withstand the glare of the spotlight? What happened to Sen. Kyrsten Sinema (D-Ariz.) during that protest at Arizona State University should never happen to anyone. Ever. Yet it shows how big a target she has become for the left. Progressives are actively threatening to primary her in 2024 and encouraging Rep. Ruben Gallego (D-Ariz.) to run. Progressive groups are pouring money into TV ads targeting her. Sinema, in turn, has retreated even more from the press, refusing to even acknowledge reporter questions this week.

Sinemanchin, as they’ve come to be called, are showing signs of heavy stress after nine months of hyper-intense media coverage. But up until, they haven’t changed their legislative positions much. Neither has budged on the filibuster. Manchin still wants the reconciliation package to come in at $1.5 trillion, infuriating Sanders (see above.) He’s even talked up the Hyde amendment, the prohibition on using federal funds for abortions, which progressives oppose intensely. Manchin has gotten a little fed up with the constant hounding by reporters in the Capitol, that’s clear. He wanted to hold one massive scrum this week and then stop answering questions. Of course that didn’t happen.

The spotlight is only going to get hotter for the two senators in the next few weeks and months. We’ll see how they hold up.

5) Where does the McConnell-Schumer relationship stand? When former Sen. Harry Reid (D-Nev.) retired after 2016 and Schumer replaced him as Democratic leader, a lot of senators hoped for a fresh start for the body. Relations between Reid and McConnell had gotten very ugly in a very personal way, so the thought was that McConnell and Schumer could change things. That hasn’t happened.

Schumer, of course, voted against the nomination of McConnell’s wife Elaine Chao for Transportation secretary in early 2017, which stunned a lot of senators at the time. Let’s just say that’s not something the Republican leader is going to forget about.

Despite that incident, the Schumer-McConnell relationship doesn’t have the same level of open acrimony of Reid and McConnell. But it’s still not great.

Some of this simply reflects the state of the nation; the country is deeply polarized politically, and Schumer and McConnell are symbols of that. They’re both partisan warriors who ran their party’s Senate campaign committees for two cycles, and they both like to give it to the other side during the daily verbal jousting on the Senate floor.

There’s also a deep distrust of the other’s goals and motivations as well. McConnell decries Democrats descent in “partisan socialism.” McConnell has cut some bipartisan deals, such as on the $1 trillion infrastructure package, the anti-Asian hate bill and Schumer’s big China competition initiative. Yet McConnell has done this in part to try to protect the filibuster, which he views as central to the Senate’s very identity. He has needed to convince Democratic moderates such as Sens. Joe Manchin (W.Va.) and Kyrsten Sinema (Ariz.) that the body can still function with the filibuster intact, which led to the dealmaking. Mitch McConnell is never going to be Mr. Bipartisanship.

For their part, Schumer and top Democrats were infuriated by McConnell’s willingness to risk a debt default in order to score political points, and they were ecstatic when he backed off Wednesday. While it may be only a temporary tactical retreat by McConnell, the Schumer camp hailed it as a victory that showed their strategy of refusing to use reconciliation to address the debt limit had paid off.

One other note — As bad as relations are between Schumer and McConnell, it’s still better than the relationship between Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy. That one is really bad — or non-existent, depending on how you think of it. 

Also: Politico’s Burgess Everett: “The debt drama that masked a brutal power struggle: Schumer vs. McConnell”

FACTIONS

New Dems’ DelBene pushes on child tax credit, Obamacare and climate

We spoke with Rep. Suzan DelBene (D-Wash.), chair of the 95-member New Democrat Coalition, about her group’s goals for the Democrats’ multi-trillion dollar reconciliation package.

Delbene, 59, is in her sixth term in the House, and she serves on Ways and Means Committee. Before her election to Congress, DelBene was a very successful tech industry executive, as well as serving as director of the Washington State Department of Revenue. So she has a fairly unique blend of business and government experience.

DelBene attended a recent White House meeting between Democratic moderates and President Joe Biden on the Build Back Better agenda. The White House hailed it as a “productive session.”

The New Democrat Coalition wants to “bridge the gap between left and right by challenging outmoded partisan approaches to governing,” according to its website. That’s a lot easier said than done these days, especially in a Democratic Party that’s seeing daily clashes between its moderate and progressive wings.

DelBene said the NDC Is focusing on a handful of key issues for reconciliation, believing those initiatives provide the best return on investment: extending the Child Tax Credit enacted as part of the American Rescue Plan with full refundability; making Obamacare subsidies permanent; “going big” on fighting climate change; and boosting federal aid for economically distressed communities.

“Those four have been important because we think they really hit the key needs,” DelBene said of the NDC’s priorities. “Look at the Child Tax Credit already in the months since the checks started going out. We’ve seen over three million children lifted out of poverty, and over three million families were able to put food on the table across the country,”

DelBene added: “But we know you don’t cut child poverty in a year. And kids don’t grow up in a year. New Dems are generally long-term thinkers.” 

The Ways and Means Committee approved an extension of the CTC through 2025 as part of its portion of the House’s $3.5 trillion reconciliation proposal. The Senate Finance Committee has yet to mark up its version of reconciliation.

DelBene worries about setting up “cliffs” where future Congresses or presidents might eliminate these policies, but she also acknowledges that these initiatives can be costly. DelBene, however, believes the benefits far outweigh the price tag.

When asked about the moderate-progressive split inside the Democratic Caucus and what it means for reconciliation, DelBene pointed out that the New Democrat Coalition includes “a lot of folks who represent purple districts and understand that there are a lot of different points of view out there.”

“We know that we haven’t helped anybody until we get things done. And everything else is just talk,” DelBene said. “I think we’ll get both bills done [reconciliation and infrastructure.] We just need to do it quickly… I think we’ll get there. I want to get there fast.”

Also: AP Interview: “Jayapal pushes Biden for $3T spending bill,” by Padmananda Rama and Mary Clare Jalonick

IN PALM BEACH 

Details on the NRSC’s big week

The NRSC is hosting its One-Year-Out Action Summit at the Breakers in Palm Beach next, and we got our hands on the full 33-page agenda. 

One thing that’s not in the agenda is that former President Donald Trump is expected to attend, which our buddy Alex Isenstadt at Politico reported a few days ago. Trump is openly lobbying for Republican senators to oust Mitch McConnell from his role as GOP leader, so it’s pretty stunning that the NRSC would have him at this retreat. And McConnell is completely safe despite Trump’s criticism.

Here are some details:

→ Speaker John Boehner and Jack Nicklaus will have a fireside chat moderated by Sen. Lindsey Graham. 🍿🍿🍿

→ Former Ambassador to the UN Kelly Craft, Phil Gramm and former USTR Bob Lighthizer will participate in a chat called “America’s Global Resiliency: A Conversation on the U.S.-China Relationship,” which will be moderated by Sen. Tim Scott (R-S.C.).

→ Elaine Chao, Brock Long and Andrew Wheeler will talk about “America’s Domestic Resiliency: A Conversation on Infrastructure, the Environment, and Emergency Preparedness Policy,” a conversation moderated by Sen. Roger Wicker (R-Miss.).

→ There will be “Piñas by the Pool"

→ There will be a dinner at the home of sugar billionaire Pepe Fanjul Sr.

→ Senators expected include:

→ Other VIPs expected include Newt Gingrich, former Sen. Kay Bailey Hutchinson and a smattering of other ambassadors.

MOMENTS

9:30 a.m.: President Joe Biden will get his intelligence briefing.

9:35 a.m.: Vice President Kamala Harris will leave for Newark.

10 a.m.: Biden will sign three bills in a closed ceremony.

11 a.m.: Sen. Bernie Sanders (I-Vt.) will hold a pen and pad on the budget.

11:30 a.m.: Biden will speak about the September jobs report.

11:45 a.m.: Harris will hold a roundtable on the “importance of federal investment in childcare through the Biden-Harris Administration’s economic agenda.”  at the Ben Samuels Children’s Center at Montclair State University. 

1:45 p.m.: Biden will speak about “restoring protections for national monuments and steps the Biden-Harris Administration is taking to better conserve and restore lands and waters that sustain the health of our communities, tackle the climate crisis, and power good jobs and a strong economy.”

2:30 p.m.: Biden will get his weekly economic briefing. … Jen Psaki will brief.

2:40 p.m.: Harris will tour the Essex County College vaccination facility.

4:35 p.m.: Harris will leave New Jersey for D.C.

6:15 p.m.: Biden will leave the White House for Wilmington. He’ll arrive at 7:10 p.m.

CLIP FILE

NYT

→ “Christian Conservative Lawyer Had Secretive Role in Bid to Block Election Result,” by Eric Lipton and Mark Walker

WaPo

→ “Why the Senate blinked and moved back from the brink of a federal default crisis,” by Mike DeBonis

→ “Cuomo aides sought post for Hochul in Biden administration before the N.Y. governor was engulfed in sexual harassment crisis,” by Josh Dawsey and Tyler Pager

WSJ

→ "Natural-Gas Shortage Sets Off Scramble Ahead of Winter,” by Joe Wallace, Collin Eaton and Benoit Faucon

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