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: Schumer plans votes tonight on lifting debt limit, as Republicans work on rounding up support

Democrats and Republicans in the Senate looked on track Thursday to prevent a U.S. default this month, with Senate Majority Leader Chuck Schumer indicating that votes on a short-term lift for the federal borrowing limit would happen in the evening.

“We have reached agreement to extend the debt ceiling through early December, and it’s our hope that we can get this done as soon as today,” the New York Democrat said in a brief floor speech in the morning.

Schumer then announced in the afternoon that Republican senators would get three hours of debate on the issue, followed by one hour for Democrats. The Senate then was expected to vote around 7:30 p.m. Eastern to end debate on the short-term increase for the debt limit, following that up with a vote that would deliver the increase.

The Senate’s filibuster rule requires 60 yeas to end debate on most items and allows the minority party to stymie the majority’s efforts. The chamber is split 50-50, with Democrats in control only because Vice President Kamala Harris can cast tiebreaking votes.

The chamber’s No. 2 Republican, Sen. John Thune of South Dakota, told reporters on Thursday afternoon that he was struggling to get the 10 GOP votes needed, saying it’ll happen but will require a “painful birthing process.”

The Senate is expected to lift the debt limit by $480 billion, allowing for federal borrowing until Dec. 3, when funding for the federal government is also due to end.

After a Senate vote, the House of Representatives then would have to approve the legislation, and finally President Joe Biden would sign it into law.

When asked Thursday if he supported the short-term deal on the debt ceiling, Biden told reporters: “We gotta see if the deal is done. I’m not sure of that yet.”

Democratic senators had signaled late Wednesday that their party was likely to accept an offer from Senate Minority Leader Mitch McConnell after the Kentucky Republican proposed a short-term lift to the debt limit.

In revealing his offer on Wednesday afternoon, McConnell said his party would let Senate Democrats “use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December.”

McConnell and other Republicans had argued for months that Democratic lawmakers ought to go it alone to lift the debt ceiling through a process known as budget reconciliation, as that’s how they passed a stimulus bill in March and how they’re working to pass their sweeping social-spending package.

Democrats had said again and again that the increase should happen through a standard process and criticized Republicans for preventing that, adding that acting through reconciliation would be slow and risky.

“The pathway our Democratic colleagues have accepted will spare the American people any near-term crisis by definitively resolving the majority’s excuse that they lacked the time to address the debt limit through the 304 reconciliation process,” McConnell said in a separate floor speech on Thursday morning.

“Now there’ll be no question — they’ll have plenty of time.”

U.S. stocks
SPX,
+0.83%

DJIA,
+0.98%

closed with gains Thursday, albeit off their session highs, with sentiment helped by signs that the debt-ceiling issue in Washington will be resolved for at least two months and that relations with China may be thawing.

“This is a clear near-term market positive. Default was not really an option, but the brinkmanship of recent days threatened to intensify market concerns if an off-ramp was not found by the end of this week,” said Ed Mills, a Washington policy analyst at Raymond James, in a note.

Mills said this week’s deal “does not resolve the underlying issues that led to the latest standoff, but will place pressure on Democrats to complete their entire agenda (including raising the debt limit) before adjourning for the year in December.” He predicted the new “X Date” for the Treasury Department, meaning when it would lack the cash to meet all its financial obligations, would come in 2022’s first quarter, assuming officials have the ability to use extraordinary measures.

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