Senate reaches short-term contract to raise debt cap | US Senate

Senate leaders have announced an agreement to extend the government’s borrowing power to December, temporarily avoiding the unprecedented federal default that experts have devastated the economy.

“Our hope is to achieve this right away today,” the majority leader Chuck Schumer declared when he opened the Senate on Thursday.

In their agreement, Republican and Democratic leaders recovered from a dangerous conflict over raising the country’s borrowing cap, and Democratic senators accepted an offer from Senate Republican leader Mitch McConnell.

McConnell made an offer the day before the Republicans were ready to block a long-term bill to suspend debt restrictions. Joe Biden And business leaders have expressed their concern that defaults will disrupt government payments to millions of people and put the country in recession.

Wall Street continued to rally in the news. By noon, the S & P 500 was up 1.5% and the Nasdaq Composite was up 1.8% with heavy weight on tech stocks.

The Senate was set up to vote on the bill Thursday night.

Previously, the White House Biden administration I was relieved if I was overwhelmed by the temporary correction. Deputy spokesman Karine Jean-Pierre told Air Force One reporters on their way to Chicago that it was a “positive step” with the president.

She added: Partizan soccer. This is about paying the debt that both parties have already incurred. “

The agreement sets the stage for some sort of sequel in December. Congress again faces the imminent deadline of funding the government and raising debt limits before returning to vacation.

The deal could raise the debt cap by about $ 480 billion, according to a Senate aide who is familiar with negotiations discussed on condition of anonymity. That’s the level that the Treasury said it needed to reach December 3.

Congress had only a few days to act before the October 18 deadline, which warned that the Treasury would soon run out of funds to handle the country’s already incurred debt burden.

McConnell and the Senate Republican Party argued that the Democratic Party alone needed to raise its debt cap and allow the Treasury to renew its debt so that the country could meet its financial obligations.

In addition, McConnell passed Biden’s $ 3.5 trillion legislative process, using the same cumbersome legislative process that Democrats passed the $ 1.9 trillion Covid-19 bailout bill, called a settlement, safety net, health. Insisted that it was trying to strengthen the environment. program.

McConnell said in his offer Wednesday that Republicans would still insist that Democrats use the settlement process to extend long-term debt limits.

However, Republicans are willing to “promote” the process, while Democrats use the normal legislative process to extend fixed-dollar short-term debt limits to cover current spending levels until December. He said it could be passed.

While he continues to blame Democrats, his offer will also allow Republicans to avoid the blame they would have received from several quarters in the event of a financial crisis. ..

At a White House event with top business leaders, Biden embarrassed Republican senators for threatening to filibust the $ 28.4 trillion cap on government borrowing authorities.

“That’s not right and dangerous,” Biden said of resistance by Senate Republicans.

Prior to the White House meeting, the administration warned that if the borrowing limit was not extended, it could cause an international financial crisis that the United States might not be able to control.

“Defaults are likely to shock global financial markets, freeze global credit markets and plunge stock markets,” said the White House Economic Advisory Board. “Employers around the world will probably have to start firing workers.”

The recession that could be triggered could be worse than the 2008 financial crisis, as many countries are still suffering from the Covid-19 pandemic, according to the report.

Once a routine problem, raising debt limits has been politically endangered over the past decade, especially by Republicans to counter rising government spending and debt burdens.

Senate reaches short-term contract to raise debt cap | US Senate

Source link Senate reaches short-term contract to raise debt cap | US Senate

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