US House passes bill to avoid gov't shutdown, suspend debt limit

WASHINGTON - The US House of Representatives on Tuesday night passed a bill that would prevent a federal government shutdown and suspend the debt limit on government borrowing into December 2022.

The bill now heads to the Senate, where the Senate Republicans have vowed to block it.

The Democratic-controlled House passed the bill by a party-line vote of 220 to 211. The legislation would keep federal government agencies operating through Dec 3 after current government funding is set to lapse at the end of September.

By combining the debt limit suspension with the short-term government funding bill, the Democratic leaders are pressuring the Republicans to support the debt-limit increase.

However, Senate Minority Leader Mitch McConnell signaled on Monday that Republicans would help pass a short-term government funding bill only if Democrats separate it from a plan to suspend the debt limit through 2022.

"We will not support legislation that raises the debt limit," McConnell said.

Last month, 46 Republican senators signed a letter pledging not to help Democrats raise the debt ceiling, raising the risk of US defaulting on its obligations in the fall.

As part of a bipartisan budget deal enacted in August 2019, the Congress suspended the debt limit through July 31. After the debt limit was reinstated on Aug 1, the US Treasury Department began using "extraordinary measures" to continue to finance the government on a temporary basis.

US Treasury Secretary Janet Yellen on Sunday warned that US economic recovery would reverse into recession if the Congress fails to swiftly raise the federal debt limit.

"Congress has raised or suspended the country's debt ceiling about 80 times since 1960. Now it must do so again," Yellen said in a Wall Street Journal opinion piece.