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Senate closes in on deal to prevent financial catastrophe – for now


Senate leaders Chuck Schumer and Mitch McConnell held talks through the night on Wednesday as they work to hammer out a deal to raise the nation’s debt limit ahead of an October 18 deadline.

The two sides are nearing agreement and working on the final details to raise the nation’s borrowing abiliites in order to avoid the government defaulting on its debt and triggering a financial crisis. 

‘We’re making good progress, we’re not there yet, but I hope we can come to an agreement tomorrow morning,’ Schumer told reporters late Wednesday night in the Capitol

And when he got to the Capitol Thursday morning, he simply said: ‘We’re getting there.’ 

Senate leaders Chuck Schumer I(above) and Mitch McConnell held talks through the night as they work to hammer out a deal to raise the nation’s debt limit

The light in the cupola of the Capitol Dome is illuminated, indicating that work continued in Congress overnight on Wednesday

The light in the cupola of the Capitol Dome is illuminated, indicating that work continued in Congress overnight on Wednesday

A vote on the matter could come as early as Thursday, which would allow the Senate to pivot to President Joe Biden’s $3.5 trillion budget package of social programs. 

McConnell backed down from the Republicans’ hardline position and offered Schumer a deal on Wednesday that would do a short-term extension of the debt limit through December. 

Democrats are prepared to accept the deal to kick the can down the road for another two months, several senators said on Wednesday.

McConnell’s offer has a caveat on it – Democrats put a price tag on raising the debt limit and not extend it to a certain date. 

And he did not lift the Repubican blockade of a longer-term increase. McConnell repeated his demands that Democrats use the complicated and time-consuming procedure known as reconciliation for a long term extension. 

Progressive independent Senator Bernie Sanders of Vermont said Democrats accepted the deal because ‘Mitch McConnell finally saw the light’ in proposing a solution that could pass.

‘There would have been a global economic collapse if in fact the wealthiest nation on earth did not pay its debts,’ Sanders said. ‘We’re going to pay our debts. We have two months to figure it out.’ 

While the deal does buy time, it also gives a December deadline, which would be around the same time Congress is facing a deadline to fund the government and stave off a shutdown. It also puts a band aid on the debt issue as Democrats try to pass Biden’s ambitious social agenda, which Republicans oppose and some moderate Democrats decry as too expensive. 

However, Democrats said they will not bend on McConnell’s demands that the majority party use reconciliation to extend the borrowing limit by a year or more.

‘I think it’s great that (McConnell’s) folded and we’re gonna move our agenda and we’re gonna take care of the debt ceiling and then we’re going to go on and pass infrastructure,’ said Democratic Senator Tammy Duckworth of illinis.

‘We’re not gonna do reconciliation,’ she said, which other Democratic senators echoed.

Other Democrats painted McConnell’s offer as a win.  

‘McConnell caved,’ said Massachusetts Senator Elizabeth Warren.

Senate Democratic Leader Chuck Schumer

Senate Republican Leader Mitch McConnell

Senate Democrats are prepared to accept Senate Minoirty Leader Mitch McConnell’s (right) deal for raising the debt ceiling in December. Majority Leader Chuck Schumer (left) walks to his office on Wednesday as they warred over the details of the legislation

Initially, McConnell refused to lift the Republican blockade to increase the nation’s borrowing limit long term, reiterating his offer to help Democrats do that through reconciliation. 

Senate Democrats came out of an afternoon caucus meeting sounding positive about the offer to raise the debt limit until December and tried to paint it as a victory. 

The key words in McConnell’s offer are ‘a fixed dollar amount.’ Republicans want Democrats to raise the debt ceiling by a specific number and are filibustering a House-passed bill that would suspend the debt limit through December 2022 – after the midterm election.  

But the GOP, in turn, are then likely to use that number against Democrats in the midterm elections as they try to take control of Congress.

White House press secretary Jen Psaki wouldn’t comment on reports Democrats were leaning toward accepting McConnell’s deal. There has been no response from Senate Majority Leader Chuck Schumer.

Some Democrats didn’t like the offer.

‘It’s bulls***,’ Democratic Senator Mazie Hirono of Hawaii told reporters on Capitol Hill. 

McConnell offered a deal to Democrats that would let them raise the debt ceiling to December as long as they put a price tag on it

McConnell offered a deal to Democrats that would let them raise the debt ceiling to December as long as they put a price tag on it

But with the clock ticking to October 18th – the day the Treasury Department said it will run out of money and have to default – Democrats are running out of options.

They suffered another blow Wednesday when Senator Joe Manchin made it clear Wednesday he opposes changing the Senate rules to bypass the legislative filibuster in order to raise the debt ceiling.

‘I’ve been very very clear where I stand on the filibuster. Nothing changes,’ Manchin told reporters outside of his Senate office. 

Some Democratic senators wanted to go ‘nuclear’ – a legislative move that would allow them to bypass the filibuster, the rule that requires 60 votes to advance legislation in the Senate.

It takes a majority of 51 votes to use the ‘nuclear option’ and, in the 50-50 Senate Senate Majority Leader Chuck Schumer would need every one of his Democrats on board plus Vice President Kamala Harris to break the tie.

President Biden appears to be on board with that option.

‘I think that’s a real possibility,’ he told reporters on Tuesday. 

Manchin has been clear he opposes getting rid of the filibuster but, on Wednesday, he clarified he would oppose removing it in the case of a single piece of legislation – in this case the raising of the debt ceiling. 

He also implored Schumer and Senate Republican Leader Mitch McConnell to come together and find a way out of the legislative mess. 

‘I implore them to engage, start working, work this out. This should not be a crisis,’ he said. 

Senator Joe Manchin opposes changing the Senate rules to bypass the legislative filibuster in order to raise the debt ceiling

Senator Joe Manchin opposes changing the Senate rules to bypass the legislative filibuster in order to raise the debt ceiling

McConnell has been clear that none of his GOP lawmakers are on board to help raise the nation’s $28.4 trillion borrowing cap through regular legislative order

He has adviced Democrats to use a process called reconciliation – which also bypasses the 60 vote threshold – to raise the debt limit. 

Democrats have publicly ruled this out, saying there isn’t enough time before October 18 deadline, when Treasury Secretary Janet Yellen has warned the nation will hit the debt ceiling. Te nation has not – in modern history – defaulted on its debt.

To use reconciliation, it would take up a considerable amount of Senate time as Democrats would have to start at the beginning of the legislative process. 

Additionally, if Democrats use reconcilation, they also would have to raise the borrowing limit by a certain number instead of by a date – a figure Republicans are sure to use against them in the 2022 midterm election.

Biden and Schumer argue they will have Democrats raise the debt limit with their 50 Senate votes if Republicans will just give them the 10 votes to move it to that final step in the legislative process.

‘Our Senate Republican friends are planning to block the vote to raise the debt, the debt limit, by using a procedural power called the filibuster – to say that in plain English it means you have to have 60 votes,’ Biden said Wednesday.

‘If they don’t want to do the job just get out of the way. We’ll take the heat. We’ll do it,’ he added. 

Biden is also pushing the Senate to pass his $3.5 trillion budget package, which includes a vast array of education, health and environmental programs. 

He has conceded that number will have to come down to appease moderates Manchin and Sinema. 

Manchin seemed to indicate he’d support a package in the range of $1.9 trillion to $2.2 trillion.

‘I’m not ruling anything out, but the bottom line is I want to make sure that we’re strategic and we do the right job and we don’t basically add more to the concerns we have right now,’ Manchin said Tuesday.

But Wednesday he made it clear he was sticking to his $1.5 trillion topline. 

‘My number has been 1.5’ he said. ‘I’ve been very clear.’

Some liberals, however, want the full $3.5 trillion and are threatening to hold up Biden’s infrastructure deal in the House until they get it. Democrats hold a scant margin of four seats in that chamber and can only afford to lose three votes. 

President Biden is pushing Republicans to let Democrats raise the debt limit

President Biden is pushing Republicans to let Democrats raise the debt limit

The president is trying to negotiate a path between the two factions of his party and has conceded the overall price tag will have to come down. 

He spent the past two days in virtual calls with various members of the House – speaking to liberals on Monday and moderates on Tuesday as he tries to get those two groups on the same page as Manchin and Sinema so he can pass his agenda.

But even if he gets the House on board he could run into an additional roadblock in the Senate: Progressive Senators Bernie Sanders and Elizabeth Warren expressed skepticism about supporting a lower price tag.

Sanders pointed out the $3.5 trillion was already a compromise – liberals originally wanted $6 trillion – while Warren noteed the Senate already agreed to the $3.5 trillion budget blueprint in August.

‘Right now I’m still operating on the assumption that what we voted on, $3.5 trillion, is what we should be negotiating for,’ she said.



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