Topline
After weeks of inaction, Senate Minority Leader Mitch McConnell (R. Ky.) offered Democrats Wednesday an option to temporarily increase the national debt ceiling. This could allow lawmakers to negotiate terms for a wider resolution, as the government moves closer to default in less that two weeks.
Senator Minority Leader Mitch McConnell is a Republican from Kentucky and walks to the Senate Chamber in... [+] Washington, D.C.
The Key Facts
The top Senate Republican, who has blocked several measures to address the debt limit, stated in a statement that he would allow Democrats the opportunity to pass an emergency debt extension to cover current spending levels through December. The stopgap measure, he said, should allow Democrats more time to pass standalone legislation on the debt limit. This would be done through a special budgetary process called reconciliation. It would not require Republican support and only a simple majority vote for. McConnell stated that the GOP would not support any efforts to raise or suspend debt ceiling for an additional year earlier Wednesday and pledged to vote against a House bill on the subject later Wednesday. McConnell also said a "traditional bipartisan" conversation would be possible only if Democrats "abandon their efforts to ram through another historically reckless taxing and spending spree," referring to the multi-trillion-dollar spending package Democrats have proposed passing through reconciliation. This could help to temper concerns expressed by Senator Majority Leader Chuck Schumer (D.N.Y), who last week rejected reconciliation as a possibility because it was too slow and uncertain. The Treasury is expected to run out cash by October 18.
Important Quote
"The unified Democratic government had two and a half months to address the debt limit through reconciliationinstead, they drifted to the doorstop of yet another self-created Democrat crisis," McConnell said Wednesday. Top Democrats risked adding another crisis to the border crisis, Afghanistan crisis and inflation crisis by miscalculations or deliberately trying to bully their members into dismantling the Senate.
What we don't know
McConnell's offer is still not accepted by Democrats. However, it remains to be seen if they will try to increase or suspend the debt limit. After the House passed its standalone debt ceiling bill, Nancy Pelosi (D.Calif.), said that party leaders had rejected using reconciliation to address the national debt and instead pushed for a bipartisan vote. Pelosi stated that when President Trump was president, Democrats supported raising the debt ceiling as it was the responsible thing to have done. "I would like to see the Republicans act in a similar responsible manner."
Important Background
In late July, the United States hit its $28.5 trillion debt limit. Since then, extraordinary measures have been taken to stop the government from defaulting on its financial commitments. Although Republicans voted three times to increase or suspend the debt limit under President Donald Trump's leadership, the party rejected Democrat-led efforts this year to address debt, citing concerns about high government spending during the pandemic.
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Tens of Millions of Americans could lose benefits overnight if the U.S. defaults this month, White House warns (Forbes).
Schumer sets a time line for Debt Ceiling Showdown as Lawmakers Strive To Avoid 'Economic Catastrophes' (Forbes).
Republicans Block Democratic Effort to Raise the Debt Ceiling, As Officials Fear Economic Catastrophe (Forbes).
