Deal to avoid US default and raise debt limit tested in Senate

WASHINGTON, Dec.9 (Reuters) – A deal between the top Democrat in the U.S. Senate and the top Republican to help raise the federal government’s debt limit by $ 28.9 trillion will be tested on Thursday when the chamber votes on the measure.

The House of Representatives on Tuesday approved an unusual bill, approved by Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell, to circumvent the Senate’s “filibuster” rule and, ultimately, increase federal borrowing power by simple majority vote. Read more

The Senate is expected to hold a procedural vote at 12:30 p.m. EST (5:30 p.m. GMT) on whether to advance the measure. He is likely to have enough Republican support to reach the 60-vote threshold for the 100-seat chamber for most laws, according to a party aide.

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“I am optimistic that after today’s vote we will be on the right track to avert a catastrophic default,” Schumer said in a speech in the Senate.

If that fails, lawmakers should scramble to find a backup plan.

The Schumer-McConnell Debt Ceiling Agreement is contained in legislation that would avoid cuts to funding for Medicare, the government’s senior health insurance program, which enjoys broad bipartisan support.

The deal comes just two months after Congress agreed to a short-term increase in the debt ceiling, to avoid an unprecedented federal default on its obligations, which would have catastrophic implications for the global economy. .

Republicans tried to withhold their votes for more borrowing power, saying the increase would make it easier to pass President Joe Biden’s $ 1.75 trillion “Build Back Better” national investment bill, which they oppose.

Democrats note that legislation is needed to fund debt largely incurred during Donald Trump’s administration, when Republicans voluntarily increased Washington’s credit card bill by about $ 7.85 trillion, in part through sweeping tax cuts and spending to fight the COVID-19 pandemic.

“Soon we will be able to cross another major item off our December to-do list,” Schumer said on Wednesday, referring to the upcoming debt limitation legislation.

But some Senate Republicans, seeking to score political points by accusing Democrats of spending, opposed the deal. Republicans argue that Biden’s “irresponsible” “socialist” spending fuels the need to raise the debt ceiling.

Treasury Secretary Janet Yellen urged Congress to act by Dec. 15, and the Bipartisan Policy Center thinks Merci warned last week that the government could risk default by the end of the month if Congress does not do not act.

Democrats noted that they had voted in the past to allow debt ceiling increases to cover Republican measures, such as Trump’s tax cuts.

FIRST STEP

If the Senate passes the measure allowing a simple majority vote to increase the borrowing limit, both houses will have to vote on another bill to effectively lift the debt limit.

The bill has yet to provide a dollar amount for the new legal debt limit, which is likely calibrated to give the government enough borrowing power to extend beyond next November’s congressional election.

“Every Senate Democrat will have to put his name on the mammoth amount of debt he is prepared to rack up on the American people,” McConnell said in a speech Wednesday.

But some Republicans, angered by McConnell’s deal with Schumer, unsuccessfully attempted Wednesday to separate the debt ceiling measure from Medicare legislation.

“This idea puts us all in a box and I don’t like it,” Senator Lindsey Graham said in the Senate.

If the Senate passes the first step of the process on Thursday, with at least 10 Republicans joining the 50 Democrats and Independents, lawmakers could vote to pass the legislation by simple majority as early as 7:00 a.m. EST (1200 GMT) on Friday, unless the senators agree to expedite the matter. During the passage, he would go to Biden for the signing of the law.

Schumer then intends to pass the debt ceiling enforcement bill before next Wednesday.

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Reporting by Richard Cowan, David Morgan and Susan Cornwell; Editing by Scott Malone, Peter Cooney and Andrea Ricci

Our Standards: Thomson Reuters Trust Principles.


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