The top Democrat and Republican in the U.S. Senate announced a deal on Oct. 7 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.
He 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, senators confirmed to reporters. That’s projected to be enough 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, such as voting to allow the ceiling to be raised or suspended outside of the filibuster.
McConnell broke the impasse late on Oct. 6, offering to let Democrats approve 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 had folded.
“McConnell caved,” Sen. Elizabeth Warren (D-Mass.) told reporters on Oct. 6.
Treasury Secretary Janet Yellen warned that the United States will be unable to pay its bills if the debt ceiling wasn’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 Democrats’ 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 on Oct. 7, 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.
McConnell is working with his caucus to get 10 senators to side with Democrats to meet the 60-vote threshold, if the filibuster is used, that’s needed to pass legislation approved by the House of Representatives to suspend the debt ceiling until December 2022.
Sen. Lisa Murkowski (R-Alaska) signaled she’d be willing to join with Democrats and Sen. Shelley Moore Capito (R-W.Va.) told reporters that she would consider such a move.
Sen. Deb Fischer (R-Neb.) is undecided, while several other Republicans, including Sen. Rick Scott (R-Fla), intends to vote no.
Asked whether McConnell should have made a deal, he said, “Everybody gets to vote the way they want.”
“I do think a lot of a lot of members would rather vote no than not object,” Sen. Kevin Cramer (D-N.D.) said. “I just don’t know that Mitch has a lot of a lot of options and I think this rather brilliant, elegant solution is going to require nine people to play along.”