Showdown Over The Debt Limit: Mitch McConnell Makes New Offer For Short-Term Extension
As the White House gathered CEOs to underscore the dire situation if the U.S. were to default on its debts, Republicans floated a new offer to Democrats as a way to resolve in the short term a party stand off over the debt limit.
Senate Minority Leader Mitch McConnell proposed a short term extension of the limit at a fixed dollar amount, a measure that would cover the nation’s debt through December. What’s unclear is whether Democrats will accept the proposal. Sen. Dick Durbin (D-IL), the majority whip, was non-committal as he exited the the chamber following a vote.
It’s the latest wrinkle in a showdown that has captivated D.C. media this week as yet another example of the deep partisan divisions that seemed to have only worsened since Joe Biden took office. Senate Majority Leader Chuck Schumer has blasted Republicans for playing politics with the nation’s credit-worthiness.
Treasury Secretary Janet Yellen has warned of the consequences of not raising the debt limit by October 18, as the U.S. would enter a scenario in which it could not pay its debt obligations, something that has never happened before.
As important as the situation is, the fight over the debt limit comes down to process.
McConnell had so far refused to go along with a standalone, longer term debt limit increase, holding the threat of a filibuster that requires a 60-vote threshold for such a measure to make it to the floor.
Instead, McConnell has been insistent that Democrats raise the debt limit through a process known as reconciliation, something that would require only a majority vote. But it would likely mean that a dollar amount would have to be attached to the debt increase, something that Democrats fear would be used against them in next year’s midterm elections.
At the White House, President Joe Biden gathered a group of CEOs, telling them, “Our Republican friends need to stop playing Russian-roulette with the US economy.” Among those at the meeting were JP Morgan Chase CEO Jamie Dimon, Bank of America CEO Brian Moynihan and Citi CEO Jane Fraser.
Republicans, though, want to send a message about the debt limit, linking it to Joe Biden’s social spending proposals, the latter of which they regard as reckless. That legislation, with a cost of about $3.5 trillion, applies to future spending, while lifting the debt limit is required to pay off existing government outlays.
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