White House prepares for potential shutdown as leaders grapple with crucial deadlines, Biden agenda

• The White House on Thursday began to advise federal agencies to prepare for the first government shutdown of the Covid-19 era.
• The White House Office of Management and Budget is alerting federal agencies that, barring a new appropriations bill, they are expected to execute shutdown plans next week.
• Meanwhile, House Speaker Pelosi and Senate Majority Leader Schumer announced "an agreement on a framework" with the White House over taxes to pay for the $3.5 trillion reconciliation package.

Democrats in Congress scrambled Thursday to beat a string of deadlines that hold massive stakes for both the health of the U.S. economy and President Joe Biden's sweeping economic agenda.

House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y., aim to work their way out of multiple binds as they try to prevent a government shutdown, a default on U.S. debt and the collapse of Biden's domestic ambitions.

The leaders first find themselves staring at a Sept. 30 deadline to pass an appropriations bill before government funding lapses. The White House on Thursday began to advise federal agencies to prepare for the first government shutdown of the Covid-19 era.

The White House Office of Management and Budget is taking steps to let department and agency leaders know that, barring a new appropriations bill, they are expected to execute shutdown plans starting late next week. For many agencies, those plans often include sending workers home.

The office typically asks agencies seven days before a government shutdown to update their plans and will share a draft template each department can use to update government employees on congressional efforts to pass a funding bill and how many workers may need to be furloughed.

The communication does not reflect the office's views on whether a continuing resolution is likely or not and is viewed as more of a formal duty.

Efforts to pass a new budget are underway on Capitol Hill, where House Democrats earlier this week passed a measure to fund the government, suspend the debt ceiling, and approve emergency aid such as disaster relief.

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That proposal is expected to stall in the Senate, where Republicans are unanimous in their opposition to any bill that seeks to raise or suspend the debt ceiling. 

Democrats are on tight economic timelines. Some are self-imposed, such as Pelosi's promise to hold a vote on a $1 trillion infrastructure bill on or before Sept. 27. The Senate has already passed the measure.

But there are other, standing deadlines. While Congress must pass a new budget by the end of September to avoid a shutdown, lawmakers must also figure out a way to increase or suspend the debt ceiling by a to-be-determined "drop-dead" date.

Treasury officials estimate that lawmakers have until some point in October before the U.S. would default on its debt for the first time.

Despite the time crunch, Schumer has promised to take up the House-passed debt ceiling and government funding bill nonetheless and force the GOP to publicly vote against a bill that would keep the government open and allow the Treasury Department to continue to pay for legislation Congress has already authorized.

Raising or suspending the debt ceiling, or borrowing limit, does not authorize new federal spending, but allows Treasury to pay for legislation that lawmakers have already passed. An increase would allow the department to pay off bills associated with the trillions in Covid relief enacted under former President Donald Trump and Biden.

Many suspect that Pelosi will be forced to pass a new resolution without the debt ceiling to keep the government open. Senate Minority Leader Mitch McConnell, R-Ky., has said on multiple occasions that he would support such a "clean" bill to avoid a shutdown.

Separately, Pelosi and Schumer declared Thursday morning that they had reached an agreement on the "framework" for taxes that would be needed to fund Democrats' $3.5 trillion package to revolutionize the U.S. public safety net.

"The White House, the House and the Senate have reached agreement on a framework that will pay for any final negotiated agreement," Schumer said. "So, the revenue side of this, we have an agreement on. It's a framework. An agreement on the framework."

Moderate and progressive Democrats have clashed over the size and scope of the package. Neither Pelosi nor Schumer clarified whether the negotiators had made decisions whittling down their options for financing the bill, or were simply in agreement over which of many options they are collectively willing to consider.

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