The Senate dodged a US debt disaster Thursday night, voting in December to expand the government’s borrowing authority and temporarily averting an unprecedented federal default that experts warned would ravage the economy. and will harm millions of Americans.
A 50-48 vote in support of a bill to raise the government’s debt limit to nearly half a trillion dollars brought immediate relief to Washington and beyond. However, it only provides a relief. Assuming that the House moves, Republican and Democratic lawmakers will still have to deal with their deepening differences on the issue before the end of the year.
The debate will take place as lawmakers also work to fund the federal government for the new fiscal year and as they continue their bitter fight over President Joe Biden’s top domestic priorities – a bipartisan infrastructure plan involving nearly $550 billion. New spending as well as a more elaborate $3.5 trillion effort focused on health, safety net programs and the environment.
Compounding the crisis at hand — a disastrous default in just a few weeks — Republican Senate leader Mitch McConnell of Kentucky, after leading solid GOP opposition to a long-term extension, has voiced his call for a short-term extension of the government’s lending authority. given support. He served as Biden and business leaders escalated their concerns that a default would disrupt government payments to millions of Americans and plunge the country into recession.
The GOP concession was not popular with some members of McConnell’s Republican caucus, who complained that the country’s debt levels were unsustainable.
“I can’t vote to raise this debt limit, not now, especially given the plan to spend another $3.5-trillion dollars,” Utah Sen. Mike Lee said shortly before the vote.
And Sen. Ted Cruz of Texas said Democrats were on a “path of surrender” over the process used to lift the debt limit, “and then unfortunately, yesterday, Republicans blinked.”
But Alaska Sen. Lisa Murkowski was among those who voted to advance the bill.
“I’m not ready to take this train down a cliff,” she said.
Congress has only a few days to act before the October 18 deadline, after which the Treasury Department has warned it will lack funds to handle the country’s already accrued debt load.
The House is likely to return next week to approve the measure.
Republican leaders worked throughout the day to find the 10 votes needed from their party to push the loan limit extension until the final vote, holding a private huddle in the afternoon. It was a long and “spirited” discussion in the room, said Sen. Josh Hawley of Missouri.
McConnell allowed all ideas to circulate and eventually told the senators that he would vote yes.
The White House signaled support for Biden, with principal deputy press secretary Karine Jean-Pierre saying the president would sign a bill to raise the debt limit when it passes Congress. Criticizing Republicans, she also said, “It gives us some respite from the catastrophic lapse we were facing because of Sen. McConnell’s decision to play politics with our economy.”
Wall Street rallied modestly on Thursday on news of the agreement.
The agreement sets the stage for a sequel of sorts in December, when Congress will face pressing deadlines to fund the government and raise the loan limit before heading home for the holidays.
The $480 billion increase in the debt limit is the level the Treasury Department has said needs to be reached safely by December 3.
“I thank our Democratic colleagues for showing unity in solving this Republican-created crisis,” said Senate Majority Leader Chuck Schumer of New York. “Despite heavy opposition from Leader McConnell and his convention members, our caucus has stayed together and we have pulled our country back from the edge of the cliff that Republicans tried to push us by.”
McConnell saw it quite differently.
“The path our Democratic allies have taken will protect the American people from any near-term crisis, while certainly solving the majority’s excuse that they lack time to address the debt ceiling.” . [reconciliation],” McConnell said on Thursday. “There will be no question now: He will have plenty of time.
McConnell and fellow Senate Republicans still insist that Democrats go it alone to raise the debt limit longer. In addition, McConnell has insisted that Democrats use the same cumbersome legislative process called reconciliation that they used to pass a $1.9 trillion COVID-19 relief bill and to boost safety nets, health and environmental programs. Biden’s $3.5 trillion measure to try to pass.
On Wednesday, Biden called on top business leaders to push for immediate suspension of the debt limit, saying the deadline posed the risk of a historic default that would be like a “meteor” that could cripple the US economy. could crush and send a wave of damage across the world.
At a White House event, the president shamed Republican senators for threatening to block any suspension of the $28.4 trillion cap. He leaned into the credibility of Corporate America — a group that has traditionally been aligned with the GOP on tax and regulatory issues — as the heads of Citi, JPMorgan Chase and Nasdaq personally to drive his point home. The limit has to be raised to be called debt accumulated and virtually.
“It’s not right and it’s dangerous,” Biden said of the resistance by Senate Republicans.
Once a routine affair, raising debt limits over the past decade or more has become politically treacherous, used by Republicans, in particular, to rail against government spending and rising debt loads.
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