Senate averts U.S. debt default as Democrats, Republicans forge a deal that averts crisis until December
Senate Democratic and Republican leaders forged a stop-gap deal on Thursday to raise the debt ceiling until December after GOP Minority Leader Sen. Mitch McConnell effectively blinked to end a monthlong standoff.
The bill passed the Senate Thursday night on a 50-48 vote. Now the bill goes to the House, which is expected to pass the measure next week.
Senate Majority Leader Chuck Schumer (D-N.Y.) expressed relief on Thursday evening, accusing Republicans of having played a dangerous game with the deficit.
“Thank God common sense prevailed,” Schumer told the Daily News. “Republicans backed off, and the full faith and credit of the United States has been restored. Republicans should not repeat this process in the future — it’s too dangerous.”
President Biden signaled cautious optimism about the deal.
“We gotta see if the deal is done. I’m not sure of that yet,” Biden said in Chicago before a speech promoting vaccine mandates.
But the White House signaled the president’s support, with principal deputy press secretary Karine Jean-Pierre calling it a “positive step,” even as she assailed Republicans for blocking Democratic efforts.
“It gives us some breathing room from the catastrophic default we were approaching because of Sen. McConnell’s decision to play politics with our economy,” she told reporters.
Wall Street rallied on the news.
The 50-48 party line vote came after Republicans amassed 10 votes to shut down a filibuster by Sen. Ted Cruz (R-Texas). Cruz’s move aimed to upend ended a push by McConnell (R-Ky.) to force Democrats to pass the debt ceiling bill without Republican help.
The debt limit bill sets the stage for a sequel in December, when Congress will again face pressing deadlines to fund the government and raise the debt limit before heading home for the holidays.
The agreement will allow for raising the debt ceiling by about $480 billion, according to a Senate aide familiar with the negotiations who spoke on condition of anonymity to discuss them. That is the level that the Treasury Department has said is needed to get to Dec. 3.
A handful of conservative senators vowed to filibuster the deal, forcing Republican leaders to twist the arms of some moderates to win the 10 GOP votes needed to pass the measure.
“In the end, we’ll be there. But it’ll be a painful birthing process,” said Sen. John Thune (R-S.D.), a key McConnell lieutenant.
McConnell’s flip-flop came after he spent weeks insisting he would block Democratic efforts to raise the debt ceiling in protest of President Biden’s sprawling spending plans.
Former President Donald Trump slammed his nemesis, McConnell, for “folding to the Democrats.”
“He’s got all of the cards with the debt ceiling, it’s time to play the hand,” Trump wrote in an email to supporters.
Sen. Ron Johnson (R-Wis.) wasn’t happy about the short-term resolution, but he wasn’t going to block it, either.
“It’s definitely a punt,” said Johnson. “My suggestion was, just tell the Democrats that as long as you’re going to increase it by a set dollar amount, so that we’re not giving you a blank check, and not just suspend the debt ceiling, we wouldn’t object.
“I’m not going to object to expediting ... this process. I think it’s regrettable that any Republican has to vote on this at all.”
Congress had just days to act before the Oct. 18 deadline when the Treasury Department has warned it would run out of funds to handle the nation’s debt load, causing severe and unprecedented economic collapse.
As concerns around the debt deepened, Treasury Secretary Janet Yellen said a week ago that she supports abolishing the ceiling, given the risk it imposes on the nation’s economy. Only a small collection of countries have debt limits.
With News Wire Services
