The party is wrestling with how to narrow the package’s original $3.5 trillion price to about $2 trillion. Ms. Pelosi warned Democrats on Monday that “difficult decisions must be made very soon” on how to do so.
Democrats are using a fast-track budget process known as reconciliation, which shields legislation from a filibuster, to muscle that bill through Congress over unanimous Republican opposition.
In retaliation for that move, which was also used to unilaterally pass the $1.9 trillion pandemic relief package this spring, Republican leaders have demanded that Democrats also use reconciliation to raise the debt ceiling.
“I will not be a party to any future effort to mitigate the consequences of Democratic mismanagement,” Mr. McConnell wrote in a scathing letter to Mr. Biden on Friday, one day after joining 10 other Republicans in allowing the short-term increase to move forward. “Your lieutenants on Capitol Hill now have the time they claimed they lacked to address the debt ceiling.”
The current debt limit was set at $28.4 trillion on Aug. 1, and the Treasury Department has since relied on so-called extraordinary measures to delay exceeding the borrowing cap.
Understand the U.S. Debt Ceiling
Card 1 of 6What is the debt ceiling? The debt ceiling, also called the debt limit, is a cap on the total amount of money that the federal government is authorized to borrow via U.S. Treasury bills and savings bonds to fulfill its financial obligations. Because the U.S. runs budget deficits, it must borrow huge sums of money to pay its bills.
When will the debt limit be breached? After Senate leaders agreed to a short-term deal to raise the debt ceiling on Oct. 7, the Treasury estimated that the government can continue borrowing through Dec. 3. The deal sets up yet another consequential deadline for the first Friday in December.
Why does the U.S. limit its borrowing? According to the Constitution, Congress must authorize borrowing. The debt limit was instituted in the early 20th century so the Treasury did not need to ask for permission each time it needed to issue bonds to pay bills.
What would happen if the debt limit was hit? Treasury Secretary Janet Yellen told Congress that inaction on raising the debt limit could lead to a self-inflicted economic recession and a financial crisis. She also said that failing to raise the debt ceiling could affect programs that help millions of Americans, including delays to Social Security payments.
Do other countries do it this way? Denmark also has a debt limit, but it is set so high that raising it is generally not an issue. Most other countries do not. In Poland, public debt cannot exceed 60 percent of gross domestic product.
What are the alternatives to the debt ceiling? The lack of a replacement is one of the main reasons the debt ceiling has persisted. Ms. Yellen said that she would support legislation to abolish the debt limit, which she described as “destructive.” It would take an act of Congress to do away with the debt limit.
“Democrats are now in control of the House, Senate and the White House — they can pass a debt-limit extension using their majority,” said Representative Michelle Fischbach, Republican of Minnesota. She criticized the temporary increase — a proposal first raised by Mr. McConnell, who rejected any longer-term rise — as legislation that “accomplishes nothing more than kicking the can down the road on something that should be addressed now.”
The trillions of dollars in debt have accumulated under policies approved by both parties, and Democrats have pointed out that some members of their party joined Republicans in raising the debt ceiling when the G.O.P. controlled the White House, including under former President Donald J. Trump.