The US Senate voted Thursday to stave off a credit default that would have sparked a recession and roiled world markets as Democrats and Republicans agreed to a stop-gap fix to raise the nation’s debt limit.
The breakthrough — which temporarily defers the crisis by adding another $480 billion to the allowable debt total — came with an estimated 11 days to go until the country would no longer have been able to borrow money or pay off loans for the first time in its history.
“Republicans played a dangerous and risky partisan game, and I am glad that their brinksmanship did not work,” he said on the Senate floor.
Rather than solving the crisis, the new arrangement kicks the can down the road to coincide with another major funding deadline — a shutdown that would kick in from December 3 when the government’s coffers theoretically run out, closing federal services and properties.
Democratic House Majority Leader Steny Hoyer said Thursday night that his chamber will vote on the debt ceiling bill and send it to President Joe Biden’s desk next Tuesday.
“We can’t allow the routine process of paying our bills to turn into a confidence-shaking political showdown every two years or every two months,” White House spokeswoman Jen Psaki said in a statement.
Democrats will use the brief lull in hostilities to work on their multi-trillion dollar social spending package, the cornerstone of Biden’s economic agenda.
“The Senate is moving toward the plan I laid out yesterday to spare the American people a manufactured crisis,” McConnell said.
The United States spends more money than it collects through taxation so it borrows money via the issuing of government bonds, seen as among the world’s most reliable investments.
The ceiling has been lifted dozens of times to allow the government to meet its spending commitments — usually without drama and with the support of both parties.
But Republicans in both chambers of Congress have this time objected in protest of Biden’s social spending package, which is likely to have a final ticket price in excess of $1.5 trillion.
McConnell had been insisting since July that Democrats suspend the debt limit with no Republican help, through a laborious and partisan process known as budget reconciliation.
– ‘Uncertainty’ –
They say the process would be too complex and risky. And since it requires no help from Republicans, they worry that they will be forced to carry the political stigma of the $28 trillion-and-rising federal debt alone.
Former president Donald Trump issued a statement from his home in Florida endorsing the Democratic interpretation of developments as a tactical retreat by the Republicans.