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Senate reaches deal to avert government shutdown, Schumer says

Senate Majority Leader Chuck Schumer announced Wednesday that the Senate reached an agreement to avoid a government shutdown. Yahoo Finance's Rick Newman weighs in.

Video Transcript

- We want to check in with our own Rick Newman, because it looks like that there is an agreement to avert a government shutdown. Today is the deadline, and I believe today midnight is the deadline. But that doesn't mean all of the outstanding things are over so what's the latest, Rick.

RICK NEWMAN: Democratic leaders in both the House and Senate have signaled that they are likely to pass temporary spending bills sometime today, which will get us through probably early December. So we're not going to have a government shutdown, and what that tells you is neither party thought they would be able to make to win any political points by letting the government shutdown and blaming the other parties. So that's one thing that is not one bad thing. I I've said, it's not going to happen.

That's something markets do not have to worry about. This does not resolve the more serious issue of whether Congress will raise the borrowing limit for the US government. Treasury Secretary, Janet Yellen, has said that as of about October 18th, the government will not be able to fund everything it owes unless it's allowed to borrow more money.

So that is the deadline to look for there. I mean, the expectation obviously is that Congress will raise that debt ceiling, but just like the spending package to avert a shutdown that that is likely to come at the last minute, and markets are probably going to start to get antsy about that at some point. Now, amid all of this, Julie, we have those two big legislative packages, the so called bipartisan, infrastructure package.

I'm sorry I'm tumbling over all these multisyllabic words, but there's a lot going on here. And President Biden's much bigger social welfare and climate change package. The Democrats tried to attach those to a spending bill for the government, but it looks as if neither one of those is likely to pass this week. And there's some political drama over this bipartisan bill, which, you know, the news channels are all filled up with.

Probably what's going to happen today is there's just going to be a delay and that bipartisan package. It's going to probably be described as the Democrats are in disarray. They're falling apart. They can't get their act together. But this is just the sausage getting made and some of the analysts I'm following are saying, there still is a pretty good chance. The infrastructure package will come together at some point perhaps in a couple of weeks. Bigger questions about that giant spending bill that Biden wants.

- Rick, I was just watching the countdown clock on screen there. You really just ratcheting up. It's only 14 hours away, wow. Nonetheless--


- Yeah. It's right there. I mean Rick you got to turn us on on your computer on the side over there. It's pretty interesting stuff. On the infrastructure package Rick, any word or any chatter on how it's going to get paid for?

RICK NEWMAN: Now, the infrastructure package, and so this is the one that has a price tag of around $1 trillion dollars. Now, about 500 billion of that is money that Congress has already appropriated. That came as part of prior relief bills. That's money that has not been spent. And no, there are no tax increases to pay for the extra $500 billion. And that is kind of fine with everybody at this point. Both parties seem to be willing to sign on to that. This will get some Republican votes, but not a lot of Republican votes. But, you know, the idea with infrastructure, it is an investment, supposedly, that generates a return, so that's an OK thing to do.

The big battle, of course, is over the $3.5 trillion, and in order to pay for some of that, that's that's where the tax increases would come from. That a very difficult for Congress to pass. It's going to be a higher corporate income tax, higher income taxes on the wealthy, although not as high as Biden wants in either case probably. And that's why that one is such a big battle, so that is going to provide a lot of fireworks down the road.

- Meanwhile, I believe the congressional softball game came back yesterday.

RICK NEWMAN: Yeah, they took time off from negotiating important matters for the nation to play a baseball game. And apparently--

- I'm so glad they took the time to do that.

- Any home runs? Any home runs, Rick?

RICK NEWMAN: I wasn't watching. I was out doing something else. I'm sure there is a replay on YouTube for people who just can't get enough or maybe it's on C-span for all the political junkies

- Lisa, as long as it's not on here, Rick, I want to watch that. As long as there's time.

RICK NEWMAN: I hear I hear there were high level meetings at Yahoo Finance about whether we should preempt regular programming for the congressional baseball game and [INAUDIBLE] prevailed.

- I'm pretty sure that the GOP team won, but I got-- I got to do some more-- some more looking into that. OK. We'll see what actually happens in the congressional chambers. If they win there too, and hopefully for shutdown purposes, maybe they don't.