Schumer says deal has been reached on extending short-term debt ceiling

WASHINGTON – Senate Majority Leader Chuck Schumer said Democrats and Republicans have reached an agreement to extend the debt ceiling until early December and the Senate could pass the measure as early as Thursday later , pushing back a possible government default by several months.

“We hope we can do this today,” the New York Democrat said in a brief statement to the Senate.

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Mr Schumer and his GOP counterpart, Senate Minority Leader Mitch McConnell (R., Ky.), Are yet to outline the details to lawmakers in their respective parties, which is expected to happen later Thursday. Questions remain as to whether Republicans will allow Democrats to move immediately to a final vote, and if not, how many Republicans will vote with Democrats to clear the 60-vote hurdle that has been a regular 50-50 Senate hurdle.

The possibility of a breakthrough emerged on Wednesday afternoon, when Mr McConnell proposed extending the debt ceiling until December, provided Democrats put a dollar amount on the debt level.

“The majority had no plan to prevent the default,” McConnell told the Senate Thursday. “So we moved on. “

Treasury Secretary Janet Yellen warned her department would likely exhaust its money conservation measures by Oct. 18 if Congress did not act, saying at a White House meeting Wednesday that the country “was heading for disaster”.

The House is still expected to approve any legislation, which is expected to be enacted by President Biden.

The debt ceiling does not authorize new spending but allows the treasury to raise funds to pay for spending that the government has previously authorized. Even so, Republicans wanted to force Democrats to exceed the debt limit without any help from the GOP, seeking to tie Democrats, at least in the eyes of voters, to higher debt levels just as the party pursues programs that would cost trillions of dollars.

Democrats argued that both sides should be responsible for raising the debt ceiling, noting that increases or suspensions of the limit were bipartisan under the Trump administration.

As federal debt and budget deficits rise in Washington, it’s unclear whether Democrats and Republicans are concerned. Gerald F. Seib of the WSJ examines each side’s position on the issue. Photographic illustration: Todd Johnson

“We are prepared to accept this offer to avoid fiscal ruin, but we are all beside ourselves that the only thing Republicans are prepared to do is to avoid disaster for three months and put ourselves back in this position. “said Senator Chris Murphy. (D., Connecticut).

Mr McConnell said the opening was intended to “protect the American people from a short-term crisis created by the Democrats.”

Democrats have struggled to raise the Senate debt ceiling to 50-50 because they need 60 votes to move most laws forward.

Faced with this dynamic, Democrats and Republicans had been fighting for weeks over the modalities by which the Senate would allow an increase in the debt ceiling.

Rather than allowing Democrats to pass a bill through normal legislation, Republicans insisted Democrats should use a process called reconciliation, which allows legislation to proceed with a simple majority. simple but requires complicated legislative steps, including two marathon sessions of amendment votes known as “vote -a-rama.”

Democrats, who use reconciliation to pass much of Biden’s legislative agenda, argued that also adopting this procedure for debt limit would be too risky and take too long, and said the path the easiest way was for the Republicans to withdraw. But other factors were at play: Under the rules governing reconciliation, Democrats may also be forced to put a dollar value on the new debt ceiling level, tying Democrats more directly to higher debt, rather than simply suspending the limit at a future date.

This fight was announced to be reaffirmed in several months, but the agreement allows the two parties to regroup. For Democrats, the delay will allow them to focus directly on their intra-party negotiations on their multibillion-dollar health, education and climate package, as well as a parallel bipartisan infrastructure bill in the House.

Republicans, for their part, have pushed back an immediate deadline and may continue to try to force Democrats to resort to reconciliation, saying Democrats could no longer say they were running out of time.

Senate Democrats, who met behind closed doors Wednesday morning with White House officials including chief domestic policy adviser Susan Rice, had not agreed to a backup plan if they continued to not being able to recruit 10 Republicans needed to advance most laws.

Democrats had started discussing whether to reduce the filibuster – the tactic that allows the minority to block legislation by mustering 40 of 100 invalid votes – to allow a debt ceiling increase to pass with them. votes from 50 senators, Vice President Kamala Harris breaking a tie. Sen. Joe Manchin (D., W.Va.) effectively threw cold water on that plan on Wednesday when he indicated he would not support such a move, but growing clamor among Democrats may have helped push the two sides to an agreement. .

Write to Siobhan Hughes at [email protected]

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