U.S. Senate sets debate, preliminary vote on debt ceiling hike

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WASHINGTON (Businesshala) – The US Senate tried to pass a stop-gap increase in the Treasury Department’s $28.4 trillion lending authority on Thursday, as lawmakers sought to address concerns about a debt default in less than two weeks. ran for

Journalists face off after U.S. Senator Joe Manchin (D-WV) announced that the U.S. Senate had reached an agreement to increase the Treasury Department’s lending authority by $480 billion at the U.S. Capitol in Washington, 7 October, 2021. Businesshala/Leah Millis

Democratic Senate Majority Leader Chuck Schumer scheduled four hours of debate on the bill, which would raise the debt limit to $480 billion — enough to keep Treasury lending and spending lukewarm, at least in early December.

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The duration of the debate could be shortened if all 100 senators agreed, but it was unclear whether all 50 of Senate Republican Leader Mitch McConnell’s caucuses would do so.

If the law clears that the first hurdle to limit debate on the bill is, as expected, the Senate will then be ready to vote on raising the debt limit to $28.9 trillion.

If the Senate can’t agree on a move toward passage, the debate could spill over to Friday or the weekend.

“We have reached an agreement to extend the loan limit through early December and we hope to have that done as soon as today,” Schumer said earlier on Thursday.

News of the talks prompted Wall Street’s main indices to end sharply higher in a broad-based rally. In a sign of relief in the bond market, yields on one-month Treasury bills fell to their lowest point since September 8 as investors believed the risk of default had waned.[.N][US/]

There were early signs of resistance from some Republicans who registered opposition to either the bill itself or the procedures for debating it.

Gaining enough Republican support to immediately move forward on the bill, No. 2 Senate Republican John Thune, told reporters “would be a painful birth process.”

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If the Senate approves the bill, the Democratic-led House of Representatives will vote on the measure before going to President Joe Biden for signing into law.

reconciliation

Washington’s debt ceiling problems are unlikely to be resolved even with the passage of a short-term increase.

McConnell is still expected to insist that the next increase in December will be achieved through a “budget reconciliation” process that is time-consuming but will allow passage without a vote from his party.

Doing so could strengthen Republican candidates in the 2022 congressional elections as they try to burnish their credentials as fiscal conservatives — even though most of them have previously used an array of measures passed during Republican Donald Trump’s administration. support, which reduced the US budget deficit.

Democrats have strongly dismissed using the conciliation process – which they have turned to pass some of Biden’s other priorities – too cumbersome and setting a bad precedent in the matter.

Referring to the deal providing debt ceiling relief until December, McConnell said in a Senate speech: “There will be no question now. They (Democrats) have plenty of time to pass the next increase using reconciliation.” Will happen”.

Democrats were trying to pass legislation that would have raised the debt limit through the end of 2022, which Republicans blocked.

Without Congressional action, the Treasury Department predicts that it will run out of ways to pay all of its bills and meet its debt obligations by October 18.

While the deal relieves debt ceiling pressure for now, it adds to the high-stakes, partisan battle that Congress will wage through the end of the year.

Democrats want to pass two big spending bills that make up much of Biden’s domestic agenda in the coming weeks, including a multitrillion-dollar social policy package to be passed by reconciliation and a $1 trillion bipartisan infrastructure bill. is included. It also faces a deadline for funding the government beyond December 3.

The partisan debt limit battle left Republicans fearing that Democrats might change a rule here, known as a filibuster, that required a supermajority of 60 votes to push most laws if they didn’t address the debt issue. is required.

The 50-50 split in the Senate has allowed Republicans to use filibuster to block many Democratic initiatives.

Biden said late Tuesday that Democrats would consider raising the debt limit and making an exception to the filibuster here to protect the economy.

Reporting by Susan Cornwell, David Morgan and Makini Bryce; Written by Richard Cowan; Editing by Scott Malone, Chizu Nomiyama and Sonya Hepinstall

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