Dodging debt disaster, US Senate votes to extend borrowing

Washington

The Senate avoided a U.S. bankruptcy by voting to extend the government’s borrowing authority until December. This temporarily prevents an unpredicted federal default, which experts predicted would cause economic chaos and affect millions of Americans.

The party-line Democratic vote of 50-48 in support of the bill to raise the government’s debt ceiling by nearly a half-trillion dollars brought instant relief in Washington and far beyond. It is not a complete reprieve. If the Senate votes on Thursday night, as it did, the House will vote in favor of the Senate. However, Republican lawmakers and Democratic legislators will have to continue their fierce debate over the issue before the year ends.

This debate will occur as legislators also attempt to finance the federal government in the next fiscal year. They continue their bitter fighting over President Joe Biden’s top domestic priorities, a bipartisan plan for infrastructure with almost $550 trillion in new spending, as well as an even more extensive, $3.5 billion effort focused on the environment, health and safety net programs. To address the immediate crisis, a catastrophic default is imminent in just weeks. The Republican Senate Leader, Mitch McConnell, of Kentucky, expressed his support for the temporary extension of the government’s borrowing authority. This was after he had led strong GOP opposition to any longer extension. As Biden and other business leaders raised concerns about a default that would cause disruption to government payments and plunge the country into recession, he acted.

Some members of McConnell’s Republican caucus were not happy with the GOP’s concession to lift its blockade temporarily. They complained about how unsustainable our nation’s debt levels.

“I cannot vote to raise the debt ceiling right now because of the plan to spend $3.5 trillion more immediately,” Senator Mike Lee from Utah stated shortly before the vote .

Sen. Ted Cruz of Texas said the Democrats had been on “a path to surrender” on the process used to lift the debt cap, “and then unfortunately, yesterday, Republicans blinked.”

But Sen. Lisa Murkowski of Alaska was among those voting to end debate and allow a vote on the bill.

“I don’t want to see this train leave the cliff,” she stated.

Eleven Republicans voted for an end to the debate. This provided the necessary threshold to allow the bill to be moved to a final vote. However, in the last vote on the bill, there was no Republican who voted for Democrats. McConnell insists that only the major party can raise the debt ceiling.

Congress still has time to act before Oct. 18, after which the Treasury Department warned that it would soon run out of money to pay the country’s debt load.

The House will likely approve the measure by next week. The Senate’s action was announced by Majority Leader StenyHoyer that the House will be called back into session on Tuesday night for voting.

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

Mr. McConnell was open to all viewpoints and told senators that he will vote yes for limiting debate. The vote began with Senator John Thune from South Dakota, Mr. McConnell, and then the second-ranking Republican. After waiting as slow, but surely, nine other GOP colleagues arrived and gave their expected thumbs up, it was time for the votes to begin. McConnell made a joke about Cruz’s vote, saying: “I thought that you weren’t sure.” Thank you .”

The White House indicated its support for Biden, and principal deputy press secretary Karine Jean Pierre stated that the president would sign legislation to increase the debt limit if it passes Congress. Jabbing the Republicans, she also said, “It gives us some breathing room from the catastrophic default we were approaching because of Sen. McConnell’s decision to play politics with our economy.”

Wall Street rallied modestly Thursday on news of the agreement.

The accord set the scene for a follow-up in December when Congress faces new deadlines to finance the government and increase the debt limit. Before heading home for Christmas, Congress will have to meet the same pressing deadlines.

The $480 trillion increase in debt ceiling represents the amount that Treasury Department believes is necessary to reach Dec. 3.

“I thank my Democratic colleagues for showing unity in solving this Republican-manufactured crisis,” said Senate Majority Leader Chuck Schumer of New York. Our caucus held strong despite the opposition of Leader McConnell, and his conference members. We have pulled our nation back from the edge Republicans attempted to push us over .”

Mr. McConnell viewed it differently.

” The path that our Democratic counterparts have agreed to will save the American people from a near-term crisis and resolve the majority’s claim that they didn’t have time to deal with the debt limit via [reconciliation],” Mr. McConnell stated Thursday. There will be no doubt: They’ll have lots of time .

Mr. McConnell, along with fellow Senate Republicans insists that Democrats do it all to increase the debt ceiling over the long-term. Further, Mr. McConnell has insisted that Democrats use the same cumbersome legislative process called reconciliation that they used to pass a $1.9 trillion COVID-19 relief bill and have been employing to try to pass Mr. Biden’s $3.5 trillion measure to boost safety net, health, and environmental programs.

On Wednesday Mr. Biden called on top business leaders for support in pushing to immediately suspend the debt limit. He said that the near deadline was creating the possibility of an historic default, which would have devastating consequences for the U.S. and cause widespread damage around the world.

The president lashed out at Republican senators who threatened to filibuster any suspension in the $28.4-trillion cap. To prove his point, he leaned on the credibility of Corporate America, a group which has historically been in alignment with the GOP when it comes to tax issues.

” “It’s wrong and dangerous,” said Mr. Biden about the opposition by Senate Republicans.

Although once a simple matter, increasing the debt limit has been politically dangerous over the last decade. This is why Republicans have used it to criticize government spending and the growing debt load.

This story was reported by The Associated Press.