Democrats and Republicans agree to increase short-term debt limit
The Senate Democrats’ decision to tackle the debt ceiling issue came as White House press secretary Jen Psaki said the Biden administration would prefer to avoid a short-term measure. âWe don’t need to kick the box. We don’t need to go through a cumbersome process, âPsaki said, although she didn’t rule out accepting such a deal as an alternative to default.
Senator Christopher S. Murphy, D-Conn., Who hours earlier had dismissed McConnell’s offer as a “terrible idea,” said using reconciliation to raise the debt limit would set a precedent “horrible”.
âYou have to hope that the debt ceiling comes at a time when you have a reconciliation,â Murphy said, pointing to the limited time frame in which the process can be used under the budget act. âThe bottom line is that Republicans knew they were going to be blamed for this if they didn’t show up to the table with a proposal that takes us to at least December. Hopefully in December they will realize that doing this three months at a time is not in their best interests.
But a short-term debt limit setting, details of which were still being negotiated, could nonetheless calm nervous financial markets and defuse a political crisis in Washington. The government would be unable to pay all of its bills after Oct. 18 unless the statutory debt ceiling is lifted, warned Treasury Secretary Janet L. Yellen.
Democrats had pushed for legislation that would suspend the debt limit until Dec.16, 2022. But McConnell’s offer called for raising the short-term debt limit by a specific amount, which the finance ranking member of Senate Michael D. Crapo, R-Idaho, said could be around $ 300 billion.