Debt-Limit Bill Passes Senate, Heads to House

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Democrats strike a deal with Republican leaders that averts an imminent lapse but sets off another showdown within months

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Based on a motion made Wednesday by Senate Minority Leader Mitch McConnell (R., Ky.) and accepted Thursday morning by Majority Leader Chuck Schumer (D., N.Y.), the law would increase the nation’s borrowing limit to $ 480 billion. The Treasury Department says that the country’s cash needs need to be met by December 3.

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The bill now goes to the Democratic-controlled House, where House Majority Leader Steny Hoyer (D., MD) said lawmakers would be recalled from recess for the October 12 vote. The White House said President Biden would sign the bill.

The White House on Thursday night urged Congress to address the debt limit after December.

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White House Press Secretary Jen Psaki said, “We cannot allow partisan politics to hold our economy hostage, and we will continue the routine process of paying our bills every two years or every two months with a confident Can’t allow this to turn into a political demonstration.” said in a statement.

Republican leaders made clear their preference to allow Democrats to go straight to a simple-majority vote, rather than forcing them to overcome the 60-vote barrier, which has been a constant 50-50 Senate hurdle. Is. But after Sen. Rand Paul (R., Ky.) refused to go along with the GOP leadership plan, GOP leaders gave enough support to take the law to its final hurdle.

The political difficulty of the vote for Republicans – who have said that Democrats alone should be responsible for raising the debt limit, as opposed to their social-policy and climate spending plans – was clear. When Sen. John Cornyn (R., Texas) cast the “Aye” vote, he pointed to a fall on his sword.

Mr McConnell also voted yes, as did Sens. John Thune (R., SD), John Barrasso (R., Wy.), Rob Portman (R., Ohio), Lisa Murkowski (R., Alaska), Susan Collins. (R., Maine), Richard Shelby (R., Ala.), Roy Blunt (R., Mo.), Shelley Moore Capito (R., W.Va.) and Mike Rounds (R., S.D.).

For weeks, as both sides tried to pressure each other on how to address the escalating deadline, Republicans tried to force Democrats to use a complicated process called escalation without the help of the GOP. To pass is called conciliation. The prospect of a breakthrough emerged on Wednesday afternoon, when Mr McConnell proposed extension of credit limit Until December, provided that Democrats stick a dollar amount to the debt level.

Treasury Secretary Janet Yellen has warned that her department could end its cash-conservation measures by October 18 if Congress does not act, telling a White House meeting on Wednesday that the country is “looking at a catastrophe”. Is.”

Ms Yellen spoke with House Speaker Nancy Pelosi (D, Calif.) and Mr. Hoyer, telling her that “if the House fails to act next week, the country will be unable to pay its bills,” Mr. Hoyer said. Said a statement.

The debt limit does not authorize new spending, but allows the Treasury to raise funds to pay for expenses previously authorized by the government.

A Treasury spokesman said the estimated date of December 3 assumes that the Treasury will have used all available extraordinary measures at that time. But Goldman Sachs said in a note that the $480 billion amount “is higher than the Treasury is expected to receive by that date, so there appears to be a good chance that the actual deadline for the next increase will come sometime later. December 3rd.” than,” though probably not before the end of the year.

“The majority had no plan to prevent the default,” McConnell said on the Senate floor on Thursday. “So we move on.”

McConnell made his proposal as Democrats expressed growing frustration with the GOP stance, with some Democratic lawmakers floating the idea of ​​potentially changing Senate rules to go ahead with a simple majority and bypass the 60-vote limit. Gave the permission to. While Democrats limited the rule change to debt limits only, such a change could open the door to doing away with the legislative filibuster altogether.

Before Mr. McConnell publicly announced his proposal on Wednesday, he spoke directly with censors Joe Manchin (d., W.VA) and Kirsten Cinemas (d., Ariz.), two senators who rule. The strongest defender of Democratic Caucus.

In a meeting with Manchin that morning, McConnell gave a nod that he would propose to Democrats to postpone the debt-limit battle, according to a person familiar with the talks. The pair spoke several times this week about Manchin’s desire to maintain the 60-vote limit, the person said.

Later that morning, Mr Manchin gathered reporters outside his Senate office to emphasize that his stance on preserving filibuster had not changed. He urged M/s McConnell and Schumer to work out an agreement to raise the loan limit.

Early Wednesday, Mr McConnell met with Republican senators behind closed doors. People familiar with the meeting said he cited pressure on Mr Manchin and Ms Cinema to end Filibuster, at least partly, as he wanted to offer a short-term extension. He expressed concern that the debt-limit issue, rather than other Democratic priorities, such as immigration or voting rights, could prove to be the one that most threatened filibuster, and suggested that Democrats should raise the limit through reconciliation. It would be easier to devote more time to. The pressure on the two centrist senators, the people said.

McConnell’s decision to make the motion astonished many GOP senators. Some were confused about the strategy, aides said, and some did not share Mr McConnell’s fears about the filibuster. Former President Donald Trump also took the deal as a defeat, accusing Mr McConnell of “reengaging with Democrats” and urging Republican senators to withdraw their votes.

“Democratic leader Schumer was on the verge of surrender,” said Sen. Ted Cruz (R., Texas) on the Senate floor. “I think it was a mistake when the Republicans blinked.”

Sen. Mike Rounds (R., SD) said he shared Mr. McConnell’s concern about the threat to filibuster, citing the high stakes of default. “You’re really playing with dynamite, if you play chicken on that particular issue,” he said.

The dynamic within the GOP threatened to reproduce a 2014 fight over raising the debt limit, when Senate Republicans turned toward a floor vote without determining whether they had garnered the support needed to pass the measure. Proceeded.

The impasse was resolved only when Republicans asked tally clerks not to name lawmakers during the vote so that it would be easier for Republican leaders to persuade their members to change their votes from “no” to “yes,” a Democratic aide said at the time.

The debt limit date of December 3 also coincides with the deadline to defer a partial government shutdown, as the government is currently funded under a temporary measure enacted into law late last month. As a result, Congress now has a broad set of legislative challenges to address in a matter of weeks, just as Democrats are trying to move forward with a multitrillion-dollar health, education and climate-change bill.

Although the debt ceiling crisis appears to be averted, neither party has given any ground to resolve the impasse for a long time, and the debate heated up again later this year.

Instead of allowing Democrats to pass a bill through common law, Republicans have insisted that Democrats should use conciliation, which allows legislation to proceed with only a simple majority, but complicated Legislative moves are required, including two marathon amendment votes known as Vote-a-Rama.

Democrats, who have been using conciliation to pass Mr Biden’s legislative agenda, argued that adopting that process for debt limits would be too risky and time-consuming, and said the easiest way for Republicans The only way was to step aside. He dug into that position after the vote.

“Today’s vote is proof that the debt ceiling can be addressed without reconciliation,” Mr. Schumer said.

Siobhan Hughes at [email protected], Lindsay Wise at [email protected] and Eliza Collins at [email protected]

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