Senate avoids US debt crisis – for now – and votes to extend borrowing limit

Senate avoids US debt crisis – for now – and votes to extend borrowing limit

WASHINGTON – The Senate sidestepped the U.S. debt disaster by voting to extend the government’s borrowing power until December and temporarily avert an unprecedented federal default that experts say would devastate the economy and hurt millions Americans.

The Democratic 50-48 party line vote in favor of the bill to raise the government’s debt ceiling by nearly half a trillion dollars brought instant relief to Washington and far beyond . However, it only offers a reprieve. Assuming the House approves the Senate vote on Thursday night, which it will do, Republican and Democratic lawmakers will still have to address their deep differences on the issue before the end of the year.

This debate will take place as lawmakers also scramble to fund the federal government for the new fiscal year and continue their bitter fight over President Joe Biden’s top national priorities – a bipartisan infrastructure plan with nearly $ 550 billion. dollars in new spending as well as a much larger, $ 3.5 trillion effort focused on health, safety net programs and the environment.

Mitigating the current crisis – a disastrous default looming in just a few weeks – Republican Senate Leader Mitch McConnell of Kentucky has offered his support to allow for a short-term extension of the government’s borrowing power after leading a strong GOP opposition to a longer extension. He acted as Biden and business leaders increased fears that a default would disrupt government payments to millions of Americans and plunge the country into recession.

The GOP’s concession to abandon its blockade so far has not been popular with some members of McConnell’s Republican caucus, who have complained that the country’s debt levels are unsustainable.

“I can’t vote to increase this debt ceiling, not at this time, especially given the plans at stake to immediately increase spending by an additional $ 3.5 trillion,” said Senator Mike Lee of the Utah shortly before the vote.

Sen. Ted Cruz of Texas said Democrats were on “a path of capitulation” on the process used to raise the debt ceiling, “and then, sadly, yesterday the Republicans blinked.”

But Senator Lisa Murkowski of Alaska was among those who voted to end debate and allow a vote on the bill.

“I don’t want to let this train fall off the cliff,” she said.

Eleven Republicans voted to end debate, providing the threshold necessary to move the bill to a final vote. However, no Republican sided with the Democrats in the final vote for the measure. McConnell insisted that the majority party will have to raise the debt ceiling itself.

Congress only has a few days to act before the Oct. 18 deadline, after which the Treasury Department warned it would quickly run out of funds to manage the country’s already accumulated debt.

The House is expected to approve the measure next week. After the Senate action, Majority Leader Steny Hoyer announced that the House was called back into session Tuesday night for the votes.

Republican leaders worked all day to find the 10 votes they needed from their party to advance the extension of the debt ceiling to a final vote, holding a private meeting in the late afternoon. It was a long and “heated” discussion in the room, said Senator Josh Hawley of Missouri.

McConnell allowed All Views on the air and ultimately told senators he would vote yes to limit debate.

The vote began with McConnell and South Dakota Senator John Thune the second-row Republican patiently waiting so slowly but surely nine of their GOP colleagues came in and gave the planned go-ahead. When Cruz voted no, McConnell joked, “I thought you were undecided. Thanks for introducing yourself.

The White House signaled the support of Biden, Deputy Senior Press Secretary Karine Jean-Pierre saying the president would sign a bill to raise the debt limit when it is passed by Congress. Stinging Republicans, she also said: “It gives us some breathing space from the catastrophic default we were approaching as a result of Senator McConnell’s decision to play politics with our economy.”

Wall Street recovered slightly on Thursday when the deal was announced.

The deal sets the stage for some sort of sequel in December, when Congress faces pressing deadlines again to fund the government and raise the debt ceiling before heading home for the holidays.

The $ 480 billion increase in the debt ceiling is the level the Treasury Department has declared necessary to reach safely on December 3.

“I thank my fellow Democrats for showing unity in resolving this Republican-fabricated crisis,” said Senate Majority Leader Chuck Schumer of New York. “Despite overwhelming opposition from Chief McConnell and members of his conference, our caucus held firm and we pulled our country off the edge of the cliff that Republicans tried to push us on.”

McConnell saw it quite differently.

“The path that our fellow Democrats have taken will spare the American people any short-term crisis, while definitely resolving the majority’s excuse that they ran out of time to address the debt limit through (reconciliation),” McConnell said Thursday. “Now there will be no more questions: they will have all the time.

McConnell and his Republican Senate colleagues still insist that Democrats go it alone to raise the longer-term debt ceiling. Additionally, McConnell insisted Democrats use the same cumbersome legislative process called reconciliation that they used to pass a $ 1.9 trillion COVID-19 relief bill and that they used to try to Pass Biden’s $ 3.5 trillion measure to strengthen safety net, health, and environmental programs.

Biden on Wednesday enlisted key business leaders to push for an immediate suspension of the debt ceiling, saying the approach of the deadline created the risk of a historic default that looked like a “meteor” that could crush the US economy and send waves of damage around the world.

At a White House event, the president shamed Republican senators for threatening to obstruct any suspension of the $ 28.4 trillion cap. He relied on the credibility of American companies – a group that has traditionally aligned with the GOP on tax and regulatory matters – to make his point as Citi chiefs JP Morgan Chase and Nasdaq stand together. come together in person and virtually to say the debt limit must be lifted.

“It is not fair and it is dangerous,” Biden said of resistance from Republicans in the Senate.

Once a routine affair, raising the debt ceiling has become politically treacherous over the past decade or more, used by Republicans in particular to denounce government spending and rising debt.

AP writers Lisa Mascaro, Farnoush Amiri and Josh Boak in Washington and AP Business writer Damian J. Troise in New York contributed to this article.

Robert P. Matthews