Senate Democrats agreed to a deal offered by Senate Minority Leader Mitch McConnell on a short-term increase to the national debt limit ahead of a potential default, The New York Times reports.
Democrats have tried to pressure Republicans to support a bill to suspend the debt limit to no avail even as Treasury Secretary Janet Yellen warned that the country would default on its debt by October 19. Republicans have refused to back a long-term increase but McConnell on Wednesday offered to either accept a short-term increase or speed up budget reconciliation to allow Democrats to raise the debt limit on their own.
Democrats inexplicably refused to use the budget reconciliation process, which would have allowed them to increase the debt limit to any number with a simple majority, but agreed to McConnell’s offer to fund the government through early December.
But the move hardly ends the debt showdown. Congress will again have to negotiate an increase to the debt limit by December 3 amid negotiations over President Joe Biden’s spending proposal.
Democrats claim victory:
Senate Majority Leader Chuck Schumer touted the deal on the Senate floor Thursday.
"We have reached agreement to extend the debt ceiling through early December and it's our hope that we can get this done as soon as today," he said.
The deal will raise the debt limit by nearly $500 billion, which is the amount the Treasury says it needs to pay its bills through December 3.
"Republican and Democratic members and staff negotiated through the night in good faith," said McConnell. "The Senate is moving toward the plan laid out yesterday to spare the American people a manufactured crisis."
Some Democrats touted the deal as a victory for the party, arguing that McConnell “folded.”
“Around here, two months is a lifetime,” said Senate Budget Chairman Bernie Sanders, calling the deal “very good news.”
“There would have been a global economic collapse if in fact the wealthiest nation on earth did not pay its debts,” Sanders said. “We’re going to pay our debts. We have two months to figure it out.”
The deal sets up another showdown over the debt ceiling in two months.
“We are willing to take this offer in order to stave off fiscal ruin,” said Connecticut Democrat Chris Murphy. “But we are all beside ourselves that the only thing Republicans are willing to do is prevent disaster for three months and put us right back in this position.”
Republicans have said they will only support a debt limit increase if Democrats drop their entire $3.5 trillion budget proposal, which is a nonstarter.
But McConnell was reportedly motivated to offer a deal to prevent Democrats from changing filibuster rules to increase the debt limit with a simple majority. The deal likely allows Democrats more than enough time to pass a debt limit increase themselves using budget reconciliation.