Democrats accepted an offer from Senate Minority Leader Mitch McConnell on Wednesday for a short-term suspension of the debt ceiling, delaying a showdown over the nation’s borrowing limit until December.
The Kentucky Republican stated that his plan was contingent upon a Democratic agreement that long term action to raise debt ceiling would only be taken unilaterally through budget reconciliation. The process allows specific spending and tax measures to avert the Senate‘s 60-vote filibuster threshold and pass with a simple majority.
“This will moot Democrats‘ excuses about the time crunch they created and give the unified Democratic government more than enough time to pass stand-alone debt limit legislation through reconciliation,” Mr. McConnell said.
” We’ve made it clear that we are not doing this through reconciliation. “That’s a recipe to long-term disaster,” said Senator Christopher Murphy, Connecticut Democrat. It’s up the Republicans. I hope that December is not [extending the debt ceiling].
Mr. McConnell made the offer shortly before Republicans were planning to block legislation to suspend the debt ceiling until December 2022 and as President Biden and banking and financial leaders ramped up concerns that an unprecedented federal default would disrupt government payments to millions of people and throw the economy into recession.
Jane Fraser, CEO of
Citigroup, stated that defaulting could “cause lasting damage the credibility the United States with investors as well as in financial markets around world .”
” The ramifications of this are not limited to markets,” she stated. It’s already causing some economic damage. It will affect consumers. It will hurt small businesses.”
Treasury secretary Janet Yellen warned that Oct. will be a tough month for the government. 18.
Democratic leadership are wary about reconciliation because it would require them to set a new limit for the nation’s borrowing limit. The number, which would be above the current limit of $28.8 trillion, opens vulnerable lawmakers to attack during next year’s midterm elections.
Democrats hope to extract concessions from Mr. McConnell when the government funding deadline and the debt ceiling suspension come up again in December. A Republican filibuster failed to stop a Republican attempt to link the debt ceiling and legislation to prevent a partial shutdown of the government.
Regardless, Democrats are confident that Republicans will capitulate during another showdown over the debt ceiling.
We’ve seen that Republicans eventually join us in doing the right thing. Although this is only for three months, it is evident that Republicans are aware that they will be held responsible for default.” Mr. Murphy stated. “That’s what I’ve been saying .”
Sen. Elizabeth Warren, Massachusetts Democrat, said Mr. “McConnell caved” by offering a short-term suspension of the debt limit and would do so again.
Another President Donald Trump expressed similar sentiments shortly after Mr. McConnell’s proposal was announced.
“Looks like Mitch McConnell is folding to the Democrats, again,” Mr. Trump said in a statement. “He has all the cards with the debt limit, now it’s time for him to play the hand. Don’t allow them to destroy our country .”
Sources close to the Republican leader say the proposal is a logical extension of his position that he wants Democrats to raise the debt ceiling on their own through reconciliation.
Such a maneuver would put Democrats on record as voting to increase the national debt well above $30 trillion and would likely delay Mr. Biden’s $3.5 trillion expansion of the federal safety net.
Democrats are planning to use reconciliation to move the more extensive package, which includes a slew of liberal priorities such as action on climate change, tuition-free community college and expanded health care programs.
“If Democrats abandon their efforts to ram through another historically reckless taxing and spending spree that will hurt families and help China, a more traditional bipartisan governing conversation could be possible,” Mr. McConnell said.
The short-term suspension is likely to only postpone a debt ceiling showdown, provided reconciliation is not an option, as Democrats claim.
Stock prices rose from a morning loss following Mr. McConnell’s announcement.
Democratic lawmakers this week began exploring whether they would have sufficient support to change the filibuster rules so that debt-ceiling votes would need only a simple majority of 51 votes instead of 60. For such a carve-out to be enacted, all 50 Democrats in the evenly split Senate would need to back the change.
The idea was quickly rejected by Senator Joe Manchin III, West Virginia’s critical Democratic swing vote. Mr. Manchin stated that lawmakers have a responsibility for protecting the credit of the U.S.A and its institutions.
” I’ve been very, extremely clear about where I stand on filibuster,” Mr. Manchin stated. “I don’t need to repeat that. I believe I’ve been very clear. Nothing has changed
Despite the bickering between partisans over the debt ceiling limit, polls indicate that voters have mixed opinions.
A survey conducted last week by The Hill/HarrisX found that 54% of registered voters oppose raising the borrowing limit, while 46% support the move. A poll from The Economist/YouGov found that 34% of adults favor raising the limit and 32% oppose, with 34% undecided.
Both polls indicate that positions on the topic are closely tied to partisan affiliation. Republicans are vehemently opposed to raising the debt limit, and Democrats support increasing it.
Jeff Mordock contributed this article. It is partly based on wire service reports.