WASHINGTON – The Senate Thursday night ended a partisan stalemate over the nation’s debt ceiling that had threatened to roil global financial markets, agreeing to a temporary extension that portends another showdown in early December.
By a 50-48 vote, the Democratic-led Senate approved the two-month extension. Some Senate Republicans joined Democrats to end a filibuster and allow the bill reach the floor. It passed with a simple majority.
This was the greatest obstacle to preventing a default, which economists fear would wreck the global economy. Next week’s session of the House will be over, but the House must still pass the bill before Oct. 18 when the U.S. Treasury defaults. The vote is scheduled for next week.
This vote ended the drama that had been days. Republican Senate Leader Mitch McConnell had promised not to assist Democrats with solving the crisis, claiming they control all government levers and did not include enough GOP lawmakers in spending bill discussions.
“We pulled our country back from the cliff’s edge that Republicans tried to push us over,” said Senate Majority Leader Chuck Schumer, D-NY.
Nancy Pelosi, House Speaker, said that members can be called back to vote early. If a request for an extension is received, President Joe Biden indicated that he will sign it.
“The president looks forward to signing legislation to raise the debt limit when it is passed by Congress,” White House spokeswoman Karine Jean-Pierre said Thursday.
It does not postpone a long-term decision regarding the debt limit. To avoid default, Congress must act by December on a new debt limit solution.
If the United States defaults on its debt for the first time, the results could lead to a global recession, Treasury officials and experts said. A down market will affect 401(k),s and other investments. In 2013, the economy suffered 1% GDP losses due to an impasse on its debt ceiling.
Wednesday’s Senate Minority leader Mitch McConnell of Kentucky, relented from his threat to block action on the debt limit.
McConnell offered to extend the limit into December if Democrats put a precise dollar figure on how much they want to raise the limit. Republicans had threatened to filibuster Democrats’ effort to suspend the limit through Dec. 16, 2022.
McConnell applauded Thursday’s short-term extension by the Senate Floor.
“The path our Democratic colleagues accepted will save the American people from any near-term crises,” he stated.
McConnell said that Republicans and McConnell had refused to help Democrats increase the limit on borrowing. McConnell said Democrats, who control the White House, House and Senate, refused to negotiate with Republicans on spending proposals – such as a budget bill with trillions of dollars for social programs that Democrats are ironing out – so they could raise the limit on borrowing on their own as well.
The Senate GOP leader pressed Democrats to pass the bill using reconciliation, a maneuver that would allow Democrats to approve the bill without Republican support. Democrats said this option would be cumbersome and lead to long debates.
McConnell said Thursday that he wanted reconciliation for the bill to proceed. He said the short-term extension means “there will be no question” that lawmakers will have plenty of time to address the debt limit through that procedure.
The Senate Democrats stated Wednesday that they will not bow to McConnell’s December demand.
“We’re going to raise the debt ceiling, and we’re going to go on and pass infrastructure,” Sen. Tammy Duckworth, D-Ill., said. We’re not going to reconcile it.”