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Moody's chief economist: US default would be 'cataclysmic'
03:32 - Source: CNNBusiness
CNN  — 

The Senate is expected to vote Monday on a key procedural motion to advance a temporary government funding bill that includes a suspension of the debt ceiling, according to senators and aides in each party.

The vote has not been locked in by Senate Majority Leader Chuck Schumer.

Republicans in the chamber plan to block the closely watched measure, which needs 60 votes to succeed, because they oppose the debt limit provision.

The vote will take place just days before the government could run out of money at the end of the month and Democrats must then determine their next steps. They could allow the government to shut down and try to blame Republicans or they could strip out the debt ceiling from the bill and pass it with GOP support, which is expected once the debt provision is removed.

Democrats are coy on what they will do, even as they recognize a government shutdown – or default – while their party controls the major levers of government in Washington would be politically untenable.

Here are the key dates to watch:

  • September 27: A self-imposed deadline for the House to vote on a bipartisan infrastructure deal, unlocking a path to the larger spending bill.
  • September 30: Government funding expires at midnight, which could trigger a shutdown.
  • Mid-October: The government reaches its borrowing limit, which could trigger a first-ever US default and a self-inflicted economic crisis if the US is unable to pay all its bills on time. It could delay federal payments, including Social Security checks and monthly child tax credit payments.

    • “We’re first going to give 10 Republicans a chance to stand up and vote,” said Senate Majority Whip Dick Durbin of Illinois when asked by CNN whether Democrats would allow a shutdown if Republicans block the measure.

    Asked if Democrats would comply with GOP demands to strip out the debt measure, Durbin replied, “We’ll see.”

    Republican aides say they expect a the government funding bill without the debt ceiling could pass the chamber very quickly and ahead of the deadline for a shutdown.

    Durbin also would not say how Democrats would handle preventing a default and whether they would use the budget reconciliation process that they are using to pass their propose $3.5 trillion “social infrastructure” bill on a party-line vote.

    “We don’t want a default,” he replied.

    Schumer was asked by CNN’s Manu Raju if he would rule out using reconciliation to raise the debt limit, and the New York Democrat refused to respond – a sign Democrats are prepared to go that route if needed to prevent a damaging default, even as they want Republicans to share the political burden of voting for a debt increase.

    CNN’s Ali Zaslav contributed to this report.