imageStock Markets10 minutes ago (Sep 28, 2021 10:50AM ET)

(C) Reuters. FILE PHOTO: U.S. Senate Majority Leader Chuck Schumer attends a news conference at the U.S. Capitol in Washington, U.S., July 20, 2021. REUTERS/Elizabeth Frantz/File Photo

By David Morgan and Susan Cornwell

WASHINGTON (Reuters) -President Joe Biden’s fellow Democrats were seeking to head off both a government shutdown and a potentially economically crippling U.S. credit default on Tuesday while also trying to agree on a mammoth tax and spending package for his ambitious social policy agenda.

Democrats had hoped to avoid a partial government shutdown and to suspend the federal debt ceiling with a single vote. But they were blocked on Monday in the Senate by Republicans, who have offered broad opposition to Democratic legislative priorities and said the two matters should be dealt with separately.

Now Congress may tackle those issues on their own. House of Representatives Speaker Nancy Pelosi told lawmakers that the House may hold a vote later Tuesday to raise the debt ceiling, according to a source. It was not immediately clear whether the chamber would hold a separate vote to extend government funding.

In the Senate, Democratic Majority Leader Chuck Schumer has also indicated more votes are likely, but has not specified what course https://www.reuters.com/world/us/moment-truth-us-congress-government-funding-debt-biden-agenda-2021-09-27 he would take.

Lawmakers have just three days to avert a possible government shutdown by midnight Thursday, the end of the current fiscal year. Failure to do so https://www.reuters.com/world/us/what-happens-when-us-federal-government-shuts-down-2021-09-27 could results in furloughs for hundreds of thousands of federal workers in the middle of a public health crisis.

The Democrats hold slim majorities in the Senate and the House.

Congressional Democrats also will seek a way to raise the government’s $28.4 trillion borrowing cap before the Treasury Department runs out of ways to service the nation’s debt, sometime in the second half of October. Republicans have said they will not help.

Fiscal brinkmanship has become a regular feature of U.S. politics over the past decade thanks to ongoing partisan polarization.

The most recent government shutdown, occurring during the presidency of Biden’s Republican predecessor, Donald Trump, lasted 35 days before ending in January 2019.

“This isn’t your typical Washington fracas,” Schumer said on the Senate floor after Monday’s vote. “It has far more severe consequences than the typical political catfight.”

Democrats point out that much of the nation’s new debt was incurred during Trump’s administration.

A government shutdown or a default would be a setback for the Democrats, who have portrayed themselves as the party of responsible government after Trump’s chaotic presidency.

Democrats are also struggling to unite behind two pillars of Biden’s domestic policy agenda: a $1 trillion infrastructure bill and a $3.5 trillion social spending package.

A key Democratic moderate, Senator Kyrsten Sinema, was headed to the White House on Tuesday to discuss the social spending bill, a source familiar with the planning said. She has said the $3.5 trillion price tag is too high.

Democrats originally planned to handle both bills in tandem. But at a party caucus meeting on Monday, Pelosi said her chamber would vote on the infrastructure bill on Thursday even though lawmakers are still negotiating the social spending bill, including its total cost.

“We just have to make difficult choices,” Pelosi said, according to a source familiar with her comments who spoke on condition of anonymity.

Centrist Democrats have balked at the scale of the social spending package. The White House and top lawmakers may narrow some benefits to bring the price tag down, sources say, but they have yet to settle on a figure.

Lawmakers on the party’s left have threatened to torpedo the infrastructure bill. They have expressed concern that the plan to expand health and education benefits and fight climate change could fall by the wayside if Congress prioritizes spending on highways, broadband and other infrastructure.

Biden’s fellow Democrats scramble to prevent shutdown, default

Biden’s fellow Democrats scramble to prevent shutdown, default