Yellen reportedly shared the new information during an interview with The Washington Post. The Treasury Secretary encouraged a bipartisan approach but encouraged Democrats to do whatever was needed to avoid default.
The controversy involves the nation’s debt ceiling, the maximum amount of debt the government is allowed to take on without approval.
On Oct. 7, the Senate passed a temporary measure to avoid default until December.
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 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.”