Accord Reached on Raising the Nation’s Debt Limit

WASHINGTON — Senate Democrats have taken Senate Republican Leader Mitch McConnell, R-Ky., up on an offer that will temporarily end a political standoff over raising the nation’s debt ceiling by allowing an emergency extension into early December.

“We have reached an agreement,” Senate Majority Leader Charles Schumer, D-N.Y., announced Thursday morning, though he offered no specifics.

Senators could vote on the deal as soon as Thursday.

McConnell also acknowledged the agreement in remarks on the Senate floor Thursday, saying the body would be “moving toward the plan I laid out last night to spare the American people from an unprecedented crisis.”

As reported Wednesday in The Well News, McConnell made the offer shortly before Republicans were prepared to block a vote on a House proposal to suspend the debt limit until December of next year.

McConnell first announced his inclination at a Republican conference lunch Wednesday afternoon.

As the lunch broke up, Sen. Lisa Murkowski, R-Alaska, told reporters who were staking out the lunch that the proposal, which she refrained from revealing, would “give us a way out of the woods.”

Later, McConnell put out a written statement in which he said his members had “already made it clear” they would assist in “expediting the 304 reconciliation process for stand-alone debt limit legislation.”

In other words, the Republican leader was saying he was ready to let the Democrats raise the debt limit through budget reconciliation, the procedural maneuver which allows for budget-related items to pass with a simple majority. 

The Democrats used a budget reconciliation bill for the current fiscal year to lay the groundwork for passing the American Rescue Plan. 

At the time, it was believed that budget reconciliation could be used only once per fiscal year, but Senate Parliamentarian Elizabeth MacDonough ruled that Section 304 of the Congressional Budget Act of 1974 can allow for multiple reconciliation bills per fiscal year.

That opened the door to the proposed $3.5 trillion budget reconciliation package that is now being revised in Congress.

McConnell now appears to be saying Republicans will agree not to filibuster raising the debt ceiling to a fixed amount for a limited time.

“To protect the American people from a near-term Democrat-created crisis, we will also allow Democrats to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December,” McConnell said. 

“This will moot Democrats’ excuses about the time crunch they created and give the unified Democratic government more than enough time to pass standalone debt limit legislation through reconciliation,” he said.

In the alternative, McConnell said, if the Democrats abandoned the pending budget reconciliation package — something he dismissed as an “historically reckless taxing and spending spree” — he said “a more traditional bipartisan government conversation could be possible.”

Secretary Janet Yellen said earlier this week that the nation will default on its debts on Oct. 18 — an historical first — if the debt ceiling isn’t raised. If that happens, she’s said, a recession rivaling the one that gripped the nation in 2008 will surely follow.

Sen. Bernie Sanders, the Vermont Independent who caucuses with the Democrats, said he was glad McConnell “finally saw the light” when it came to the danger of having the nation default.

The Republicans “have finally done the right thing and at least we now have another couple months in order to get a permanent solution,” he told the Associated Press.

White House spokeswoman Jen Psaki was a bit more cautious during her afternoon press briefing Wednesday, which occurred just as word of McConnell’s offer, made via a press release, was spreading on Capitol Hill.

“A press release is not a formal offer,” she said.

“And regardless, even the scant details that have been reported present more complicated, more difficult options than the one that is quite obvious,” Psaki continued. “In the president’s view, we could get this done today. We don’t need to kick the can. We don’t need to go through a cumbersome process that every day brings additional risks.”

To Psaki’s point, the deal proposed by McConnell means the debt ceiling issue would have to be revisited right after Thanksgiving and certainly resolved well before Christmas.

And it is already clear that at least one prominent Republican is not on board.

In a series of Tweets Thursday morning, Sen. Lindsey Graham, of South Carolina, said “If Democrats want an expedited process to use reconciliation to raise the debt limit they can have it.  However, if Republicans intend to give Democrats a pass on using reconciliation to raise the debt limit – now or in the future – that would be capitulation.”

He added, “If Democrats are willing to change the rules of the Senate to avoid raising the debt ceiling through reconciliation they really don’t care and it is time for Republicans to push back.”