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Senate Republicans and Democrats have agreed to move forward with a plan to prevent America from defaulting on its debt until at least early December, according to Senate Majority Leader Chuck Schumer (dn. economic disaster.

important facts

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Democrats agreed to a proposal by Senate Minority Leader Mitch McConnell (R-Ky.) to lift the debt limit enough to maintain current spending levels for a short period.

McConnell insists that Democrats pass a long-term increase to the debt limit through the budget reconciliation process — a complicated and lengthy undertaking that won’t require any Republican support.

Democrats have repeatedly said they will not raise the debt limit through reconciliation, meaning a similar impasse on the debt limit could happen again in weeks.

In a statement on Wednesday, McConnell said the only way Republicans could engage in “traditional bipartisan” talks would be if Democrats reduce their proposed $3.5 trillion spending package.

Treasury Secretary Janet Yellen said that if the debt limit is not raised by October 18, the US will default on its debt for the first time in history, leading to a “catastrophic” economic impact.

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“It is our hope that we can do it as early as today,” Schumer said of a vote on the agreement.

main background

McConnell has said that Democrats should work alone on raising the debt limit because they control both the chambers of Congress and the White House. But before McConnell’s offer, Democrats had essentially cut their options for acting without Republican support. Schumer said trying to raise the debt limit through the budget resolution process would be essentially impossible to accomplish before the October 18 deadline. Democrats could Too Eliminate the filibuster when it comes to the vote on raising the debt ceiling—an idea President Joe Biden released Tuesday. But doing so would require the support of every Senate Democrat, and West Virginia centrist Joe Manchin has already said he would not support dropping Filibuster.

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Democrats in Congress are also juggling a $3.5 trillion spending package and a $1.2 trillion infrastructure bill, which is being held up by a standoff between centrist Democrats in the Senate and progressive Democrats in the House. The House Progressives have vowed to withdraw support for the infrastructure bill, which has already passed the Senate, unless it is accompanied by a vote to pass the social spending package, which is in line with those of Munchkin and Arizona. Centrist senators such as Kirsten Cinema have said they oppose. Democrats are seeking to pass the $3.5 trillion legislation in the Senate through a reconciliation process, as it has no Republican support, but a 50-50 split between the parties in the chamber means that if a single Democrat opposes it. If voted, the bill will not pass. . Munchkin has set a spending limit of $1.5 trillion for the bill. President Joe Biden said He believes he can negotiate a more expensive package with senators worth between $1.9 trillion and $2.2 trillion.

McConnell offered Democrats an emergency loan limit increase through December to avert historic defaults (Businesshala)

Republicans block Democratic effort to raise debt limits as officials warn of economic devastation (Businesshala)

It’s a ‘gimmick’: Yellen opposes creating a $1 trillion coin to save the United States from historic debt defaults (Businesshala)

a debt-limit showdown (the new York Times)

Biden sets $1.9 – $2.2 trillion price range for Social Security net bill with House progressives (CBS News)

Munchkin sets $1.5 trillion limit for Democrats’ reconciliation bill (Businesshala)