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Sen. Joe Manchin (D-W.Va.) said that he would oppose his party’s roughly $2 trillion education, healthcare and climate package, likely dooming the centerpiece of President Biden’s economic agenda as currently written, the Wall Street Journal reported. “This is a ‘no’ on this legislation,” Mr. Manchin said on Fox News Sunday. “I have tried everything.” Democrats have spent months drafting and revising the package, called “Build Back Better,” to win Mr. Manchin’s support, which they need to pass the bill through the 50-50 Senate. In his Fox News appearance and in a written statement, Mr. Manchin reiterated many of the concerns he has expressed about the bill, including its possible effect on inflation and how the cost was calculated. While Mr. Manchin has raised those concerns for months, his statement that he would vote against the bill renewed the bill’s peril, and kicked off a scramble among Democrats in Washington to try to salvage their efforts and pass an alternative bill addressing climate change and the social safety net.

Congress gave final approval early Wednesday to legislation that would raise the debt ceiling by $2.5 trillion, moving over nearly unanimous Republican opposition to stave off the threat of a first-ever federal default until at least early 2023, the New York Times reported. Democrats were united in support of the measure, which passed the Senate 50 to 49 along party lines on Tuesday afternoon and then cleared the House in a 221-to-209 vote shortly after midnight on Wednesday. Republicans opposed the legislation en masse, with only one, Representative Adam Kinzinger of Illinois, voting in favor. The bill now heads to President Biden, who was expected to quickly sign it. The swift action came a week after party leaders announced a deal to establish a one-time fast-track process to increase the debt ceiling with a simple majority vote, instead of the 60 votes needed to move most legislation through the Senate. The votes occurred with little time to spare before a potential default, which would be catastrophic for the national economy. The Treasury Department had warned that it would be unable to pay the nation’s bills soon after Wednesday, and the agency is currently using so-called “extraordinary measures,” a series of fiscal tools to delay the threat of a default. “The full faith and credit of the United States should never be questioned,” Speaker Nancy Pelosi of California said before the House vote. “The health of our economy should never be threatened. The financial security of our families must never be gambled.” Senate Majority Leader Chuck Schumer (D-N.Y.) said yesterday that the $2.5 trillion figure would be enough to punt the threat of a default past the midterm elections next year, an assessment shared by the Treasury Department, according to a person familiar with its internal estimates. The debt limit, which covers debt incurred by administrations from both parties, is currently set at $28.9 trillion.

Democrats are feeling an increased sense of urgency to quickly get President Biden’s social spending and climate package across the finish line due to the pending expiration of the expanded child tax credit at the end of the year, The Hill reported. Absent congressional action, the IRS will make its last monthly child tax credit payment on Dec. 15. Democrats see the monthly payments as critical to reducing child poverty and want to prevent a lapse. The key obstacle is Sen. Joe Manchin (D-W.Va.), who has expressed a reluctance to passing the social spending package this year. Despite Manchin’s hesitancy, key Democrats are insistent that the expanded child tax credit won’t expire. “We are not going to have a lapse in payments. That’s too important,” said Sen. Sherrod Brown (D-Ohio). The $1.9 trillion coronavirus relief law that Biden enacted in March expanded the child tax credit for 2021. The expansion included an increase in the credit amount and monthly advance payments of the credit and allowed the lowest-income families to be eligible for the full credit amount. The Treasury Department and IRS in July started sending out monthly advance child tax credit payments of up to $300 for each child under age 6 and up to $250 for each child ages 6 to 17. The monthly payments, which allow families to receive funds in installments rather than in a lump sum when they file their tax returns, are currently set to end this month.

A deal between the top Democrat and Republican in the U.S. Senate to help raise the federal government's $28.9 trillion debt limit will be tested today when the full chamber votes on whether to approve the measure, Reuters reported. The House of Representatives on Tuesday approved an unusual bill, agreed to by Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell, to sidestep the Senate's "filibuster" rule and ultimately raise federal borrowing authority by a simple majority vote. That deal comes just two months after Congress agreed on a short-term lift to the debt ceiling to avert an unprecedented default by the federal government on its obligations, which would have catastrophic implications for the world economy. Republicans have been trying to withhold their votes for more borrowing authority, contending that the increase would smooth the way for passage of President Joe Biden's $1.75 trillion "Build Back Better" domestic investment bill, which they oppose. Democrats note that the legislation is needed to finance debt largely incurred during Donald Trump's administration, when Republicans willingly jacked up Washington's credit card bill by about $7.85 trillion, partly through sweeping tax cuts and spending to fight the COVID-19 pandemic.

Republicans and Democrats in Congress have agreed on a plan to break a partisan impasse and raise the government’s debt ceiling likely through next year, pulling the nation away from the brink of a default, Bloomberg News reported. Senate GOP leader Mitch McConnell (Ky.) said yesterday that the deal he struck with Senate Majority Leader Chuck Schumer (N.Y.) would enable a procedural maneuver to increase the government’s borrowing authority with only Democratic votes. The plan, which was moving toward a House vote on Tuesday, would create a procedure to raise the debt ceiling with a simple majority in the Senate as part of a bill to prevent automatic Medicare cuts at the start of the new year. Once that passes, the 50-50 Senate would later act on the debt ceiling, sending that legislation to the House. Democratic senators said they are discussing an increase to allow borrowing through 2022, something that would take about a $2 trillion increase, according to an aide. The maneuver involves a bit of procedural gimmickry: The bill setting up the debt limit process would need 10 Republican votes in the Senate to advance, but does not itself raise the debt limit. A second bill raising the ceiling then could be passed with just Democratic votes.