Top Line

Weeks of impasse over raising the debt limit ended Thursday night, days before the US Senate voted to approve a temporary increase to the limit, days before a potentially “catastrophic” loan default, but Republicans and Democrats are up for another deadlock. Appear ready if they can’t agree on a long-term plan soon.

important facts

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The Senate voted 50-48 to approve the measure that would allow the federal government to pay off its debt until at least December 3.

The bill authorizes a $480 billion increase in the debt limit, with Democrat and Republican leadership agreeing that the federal government will maintain current spending levels through early December.

Senate Majority Leader Chuck Schumer (D.N.Y.) announced Thursday morning that Democrats had been offered a deal by Senate Minority Leader Mitch McConnell (R-Ky.) Wednesday to raise the debt limit, McConnell said. That the Democrats would get more time. To pass a long-term plan on its own.

Democrats have consistently said they want a bipartisan agreement on raising the debt limit, as both Republican and Democratic administrations have contributed heavily to the debt.

McConnell insisted that the GOP would only engage in “traditional bipartisan” talks to raise the limit if Democrats agree to significantly cut their $3.5 trillion budget proposal — otherwise, he says, up to the debt limit to Democrats. A long-term escalation would have to pass the complicated and lengthy budget reconciliation process.

Treasury Secretary Janet Yellen warned of a “catastrophic” loan default by October 18 if Congress did not act to raise the debt limit, which would have been the first default in US history, and cut funding for important programs such as social distancing. could do Security and Medicine.

what to see

If Democrats don’t move from their position against using reconciliation for debt limits and Republicans refuse to offer support for raising the limit through traditional legislation, another impasse later in the year appears inevitable. .

important quotes

“What is needed now is a long-term solution, so we don’t go through this risky drama every few months,” Schumer said on Thursday. “This is a temporary but necessary and important improvement.”

main background

Republicans in the Senate blocked two Democratic attempts to raise the debt limit last week, with McConnell saying he wants to prevent Democrats from moving forward on a $3.5 trillion budget package. But passing a bill that seems impossible in any case, as centrist Senators Joe Manchin (DW.Va.) and Kirsten Cinemas (D-Ariz.) have said the bill is too expensive. President Joe Biden has suggested a $1.9-$2.2 trillion trim-down bill could be negotiated with centrist senators. Democrats plan to pass the bill through the budget reconciliation process, which does not require Republican support but does require the support of all 50 Senate Democrats.

Millions of Americans could benefit ‘overnight’ if US defaults this month, White House warns (Businesshala)

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

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

Senate agrees to raise debt limit to avoid ‘catastrophic’ default – for now (Businesshala)