1.75 trillion stimulus, debt ceiling... The U.S. Congress is struggling before Christmas

At a time when the Democratic Party is still tug-of-war over the $1.75 trillion spending bill, the time to avoid a U.S. government shutdown and default is here again.

On November 16, U.S. Treasury Secretary Janet Yellen warned that the "deadline" for the U.S. debt ceiling was yet to come, and Treasury Department unconventional measures were expected to run out on December 15.

On November 30, the Congressional Budget Office responded to Treasury Secretary Janet Yellen's warning that if Congress does not raise the debt ceiling, the federal government could run out of money after mid-December.

Yellen earlier on Tuesday again called on Congress to resolve the debt ceiling as soon as possible, saying, "If we don't do that, it will hit the current economic recovery hard." ”

While some analysts believe the U.S. government may still have weeks or even a month to face the risk of default, longer than the government predicted, the looming risks have already made investors nervous, and the recent auction of short-term US bonds suggests that some investors are seeking to limit the risk exposure of US Treasuries, and when these Treasuries mature, the NEGOTIATIONS in the US Congress may enter a critical moment.

For months, both parties in the United States have been playing the "cowardly game" on the debt ceiling, with Republicans insisting that Democrats "go it alone" and raise the debt ceiling through a complex legislative process called "settlement."

The reason why the Republicans want the Democrats themselves to solve the debt ceiling problem by initiating a budget settlement process is because it will allow them to gain the initiative in other areas of the game; and if the Democrats choose to raise the debt ceiling alone, they will face the political pressure of "excessive indebtedness" imposed by the Republican Party.

The Democratic Party also knows that raising the debt ceiling independently will face huge political pressure, so it has always refused to do so, saying that a large part of the current debt that breaks through the ceiling is the work of the Trump administration, and raising the debt ceiling requires bipartisan promotion. This is also the difficulty of solving the current round of US debt ceiling problems.

Although Congress passed a bill on Oct. 8 to raise the federal debt ceiling in a short-term manner, raising the amount by about $480 billion to allow the U.S. government to meet its debt-servicing obligations until Dec. 3, no agreement has yet been reached on a long-term solution, effectively postponing the bipartisan political game.

With December approaching, the U.S. Congress may repeat the previous farce.

Before the end of the year, Democrats need to reach a deal with Republicans to avoid federal shutdowns and defaults and continue to fund the U.S. military, putting more pressure on passing the $1.75 trillion "Rebuild Better" bill.

After Biden formally signed the $1.2 trillion bipartisan infrastructure bill on December 15, Democratic Senate Majority Leader Chuck Schumer vowed to pass the second flagship bill on Biden's legislative agenda by Dec. 25 — a $1.75 trillion investment in the U.S. Social Safety Net. This is a major challenge, as his party still has a long list of issues at odds.

Schumer reiterated monday that he intends to pass the bill before Christmas, but concerns have been raised by West Virginia Democratic Senator Joe Manchin and others.

"The debt ceiling is an unknown factor that could spoil the entire agenda in December," said Ben Koltun, head of research at Beacon Policy Advisors in Washington.

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