Senate passes deal to raise debt ceiling into December

Written by on October 7, 2021

WASHINGTON – The Senate Thursday evening ended a partisan stalemate over the nation’s debt ceiling that had threatened to roil world monetary markets, agreeing to a short lived extension that portends one other showdown in early December.

By a 50-48 vote, the Democratic-led Senate accredited the two-month extension. Some Senate Republicans joined Democrats in ending a filibuster, permitting the invoice to succeed in the ground and move with a easy majority.

The Senate stand-off was the largest hurdle to stop a default that economists warn would trigger havoc to the worldwide economic system. The Home, which is out of session subsequent week, nonetheless must move the measure earlier than the U.S. Treasury defaults on Oct. 18.

The vote ended days of drama the place Republican Senate Chief Mitch McConnell had vowed to not assist Democrats remedy the disaster as a result of they managed all levers of presidency and had not included GOP lawmakers sufficient in discussions over spending payments.

“We pulled our nation again from the cliff’s edge that Republicans tried to push us over,” mentioned Senate Majority Chief Chuck Schumer, D-NY.

Home Speaker Nancy Pelosi mentioned members may very well be referred to as again early for a vote. President Joe Biden has indicated he would signal an extension if one reaches his desk.

“The president appears to be like ahead to signing laws to boost the debt restrict when it’s handed by Congress,” White Home spokeswoman Karine Jean-Pierre mentioned Thursday. 

The deal merely postpones a long-term resolution on the debt restrict. Congress would want to behave on one other debt restrict resolution by December to keep away from one other threat of default. 

If america defaults on its debt for the primary time, the outcomes may result in a worldwide recession, Treasury officers and consultants mentioned. A tanked market would damage 401(okay)s and different investments. A debt ceiling standoff in 2013 price the economic system 1% in GDP.

Wednesday, Senate Minority Chief Mitch McConnell, R-Ky., backed down from his risk to dam any motion on the debt ceiling.

McConnell provided to increase the restrict into December if Democrats put a exact greenback determine on how a lot they need to elevate the restrict. Republicans had threatened to filibuster Democrats’ effort to droop the restrict by means of Dec. 16, 2022.

Thursday, McConnell lauded the short-term extension from the Senate ground.

“The pathway our Democratic colleagues have accepted will spare the American folks any near-term disaster,” he mentioned.

McConnell and Republicans had resisted serving to Democrats move a rise or suspension of the debt restrict. McConnell mentioned Democrats, who management the White Home, Home and Senate, refused to barter with Republicans on spending proposals – reminiscent of a funds invoice with trillions of {dollars} for social packages that Democrats are ironing out – so they might elevate the restrict on borrowing on their very own as effectively. 

The Senate GOP chief pressed Democrats to move the invoice utilizing reconciliation, a maneuver that might enable Democrats to approve the invoice with out Republican help. Democrats mentioned this selection can be cumbersome and result in lengthy debates. 

Thursday, McConnell signaled he nonetheless needs the invoice completed by means of reconciliation. He mentioned the short-term extension means “there will probably be no query” that lawmakers may have loads of time to handle the debt restrict by means of that process.

Senate Democrats mentioned Wednesday they’d not bend in December to McConnell’s demand. 

“We’ll elevate the debt ceiling, and we’ll go on and move infrastructure,” Sen. Tammy Duckworth, D-Ailing., mentioned. “We’re by no means going to do it by means of reconciliation.” 

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