Democrats Move to Avert Fiscal Crisis, Separating Debt and Spending Bills

WASHINGTON — Democrats in Congress moved on Wednesday to avert a looming fiscal crisis, scheduling a House vote to raise the debt ceiling and preparing a separate spending bill to head off a government shutdown looming at midnight on Thursday.

The Senate could vote as early as Wednesday on the spending bill, which is needed to prevent a lapse in government funding when the fiscal year ends on Thursday and also includes emergency disaster aid. Republicans were expected to support it, after Democrats removed a debt-limit increase that the G.O.P. had refused to back.

That left uncertain the fate of the legislation to raise the statutory limit on federal borrowing, which is on track to be breached by Oct. 18 if Congress does not increase it. House Democrats appear to have the votes to pass their bill, which would lift the cap until Dec. 16, 2022, but Senate Republicans have blocked efforts to advance such legislation in their chamber, where 60 votes are needed to move most measures.

Still, the action on Wednesday appeared to pave the way to clearing the most immediate hurdle Congress faced, as Democratic leaders labored to resolve intraparty divisions that are threatening to derail President Biden’s domestic agenda.

“With so many critical issues to address, the last thing the American people need right now is a government shutdown,” Senator Chuck Schumer of New York, the majority leader, said on the Senate floor. Lawmakers were privately ironing out the details in order to quickly approve the measure and buy themselves additional time to approve the dozen annual spending bills.

The legislative Band-Aid came as Democratic leaders were working to unite their party behind two crucial priorities before a planned Thursday vote on a $1 trillion bipartisan infrastructure plan. Liberals have threatened to block that vote until the remainder of Mr. Biden’s ambitions, wrapped in a proposed $3.5 trillion spending and tax package, clear both chambers.

The decision by Democratic leaders to schedule a separate vote to raise the borrowing limit came after Senate Republicans balked at doing so as part of the stopgap spending bill, effectively stopping both measures in their tracks. It angered some moderate and conservative lawmakers in their ranks who are cold to the idea of taking a politically difficult vote to endorse more federal debt on a bill that is all but certain to stall in the Senate amid Republican opposition.

“We have a responsibility to uphold, to lift up, the full faith and credit of the United States of America — that’s what we have to do,” Speaker Nancy Pelosi of California told reporters as she left a meeting with her top deputies. She pointed out that lawmakers had already voted to raise the debt limit, when the House passed the spending bill last week.

“If they’re concerned about how it might be in an ad, it’s already in an ad,” she said.

With Democrats using the fast-track reconciliation budget process to maneuver Mr. Biden’s expansive social policy and tax cut bill into law, Senate Republicans have argued that they should use that same process to unilaterally address the debt ceiling. Democrats have repeatedly rejected that suggestion, arguing that it is too time-consuming and would risk driving the federal government into its first ever default.