The top Democrat and Republican in the U.S. Senate on Thursday announced a deal that will raise the United States’ debt ceiling for a brief period.
Senate Majority Leader Chuck Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) hammered out the agreement after Democrats refused to fold the debt limit matter into a mammoth budget package they’re hoping to ram through Congress with no Republican votes.
“I have some good news. We’ve reached an agreement on an extension of the debt ceiling through early December. It’s our hope we can get this done as soon as today,” Schumer said on the Senate floor in Washington.
The Democrat told reporters on Capitol Hill that “we’re getting there” when asked if a deal was close before entering the Senate chamber.
The agreement raises the debt ceiling by $480 billion, Sen. Dick Durbin (D-Ill.) confirmed to reporters. That’s estimated to fund government borrowing until Dec. 3.
McConnell said on the floor that the deal was reached after hours of late-night negotiations. The agreement will “spare the American people a manufactured crisis,” he added.
Democrats were facing a shrinking number of options in the face of Republican opposition to their mega-spending plans. Some were floating unorthodox plans like voting to allow the ceiling to be raised or suspended outside of the filibuster.
McConnell broke the impasse late Wednesday, offering to let Democrats pass a short-term emergency debt limit extension that would let the United States avoid a looming default until they pass a longer-term fix through reconciliation.
“Republicans remain the only party with a plan to prevent default. We have already made it clear we would assist in expediting the 304 reconciliation process for stand-alone debt limit legislation,” he said in a statement. “To protect the American people from a near-term Democrat-created crisis, we will also allow Democrats to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December. This will moot Democrats’ excuses about the time crunch they created and give the unified Democratic government more than enough time to pass standalone debt limit legislation through reconciliation.”
After the announcement, many Democrats promoted the narrative that Republicans folded.
“McConnell caved,” Sen. Elizabeth Warren (D-Mass.) told reporters on Wednesday.
Treasury Secretary Janet Yellen warned this week that the United States will be unable to pay its bills if the debt ceiling isn’t suspended or raised before Oct. 18.
“After that point, we expect Treasury would be left with very limited cash that would be depleted quickly,” she said during a meeting with President Joe Biden and business executives on Oct. 6.
Most Republicans had refused to support Democrat plans because the party has operated since Biden took office with little inclination to negotiate deals with the GOP. Democrats in March rammed through a fresh package devoted in part to COVID-19 relief using reconciliation and are poised to utilize it again to pass legislation totaling up to $3.5 trillion without Republicans.
Democrats’ use of reconciliation is “repeated and unprecedented,” McConnell said Thursday, arguing that the process amounts to passing “radical policies on party-line votes.”
Because Democrats are using the process so often, they will still have to pursue any long-term debt limit increase through the same process, he added.
Democrats also edged closer to potentially having enough votes to meet the 60-vote threshold needed to pass legislation if the filibuster is used. Because Democrats only hold 50 seats, they would need 10 Republicans to cross the aisle to pass a bill that was approved by the House of Representatives to suspend the debt ceiling until December 2022.
Sen. Lisa Murkowski (R-Alaska) had signaled she’d be willing to join with Democrats and Sen. Shelley Moore Capito (R-W.Va.) told reporters Friday that she would think about it.
Sen. Rick Scott (R-Fla.) was among those maintaining opposition to the bill.
Asked whether McConnell should have made a deal, he added, “Everybody gets to vote the way they want.”