Senate Majority Leader Chuck Schumer on Thursday accepted a Republican offer of a short-term debt ceiling increase that would avoid a financial crisis next week.
Senate Minority Leader Mitch McConnell proposed the truce after Democrats led by President Biden balked at his prior urging that they raise the debt ceiling themselves as they pursue trillions in new spending.
“We’ve reached an agreement,” Schumer said on the Senate floor. “Our hope is to get this done as soon as today.”
The measure would authorize $480 billion to hold the country over through early December, a Senate aide confirmed to The Post.
White House spokeswoman Karine Jean-Pierre said in a statement, “The President looks forward to signing legislation to raise the debt limit when it is passed by Congress.”
Biden crossed his fingers and smiled when reporters asked him about the proposal during a trip to Chicago.
“We’re going to follow Chuck Schumer’s leadership,” Jean-Pierre told reporters on Air Force One.
“This is a positive step forward,” Jean-Pierre 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.”
Schumer filed cloture on the measure shortly after his announcement — with a longer-term bill being amended to be used as the vehicle for passage.
McConnell (R-Ky.) took the first step toward ending the stalemate Wednesday by calling Schumer and Biden’s bluff, proposing either a short-term solution or an expedited reconciliation process allowing Democrats to bypass the filibuster — after the president and leader had each complained that Democrats could not do it on their own.
For weeks, the debt ceiling was a hot political issue as both sides blamed the other for fiscal brinkmanship.
Republicans led by McConnell previously said that Democrats should own the vote and use special budget reconciliation rules that allow for a bare majority in the evenly divided Senate. But Democrats said Republicans helped grow the debt in the past and could cause an economic catastrophe if they didn’t fall in line.
Biden claimed Wednesday that a “meteor” could “crash” into the US economy because of Republicans — as Democrats rebuffed McConnell’s initial urging that they use a budget reconciliation bill to avoid that happening.
Treasury Secretary Janet Yellen warned the country would exhaust its resources and risked defaulting on its financial obligations — and leaders and staff worked throughout Wednesday night to hammer out the deal.
Republicans had said that they would not greenlight additional spending as members across the aisle look to move on a multi-trillion social spending package. Democrats called for the debt limit to be raised in a bipartisan manner.
McConnell took credit for the short-term agreement, which tees up a November fight over a longer-term solution.
“Republican and Democratic members and staff negotiated through the night in good faith. The Senate is moving toward the plan I laid out yesterday to spare the American people a manufactured crisis. All year the Democratic government has made unprecedented and repeated use of reconciliation to pass radical policies on party line votes,” he said on the floor.
“So back in July Republicans informed our colleagues they would need to pursue any long-term increase in the debt ceiling through the same process. The president, the Speaker, and the Democratic leader had three months’ notice to do their jobs, but for two and a half months the Democratic leaders did nothing and then complained that they were actually short on time. The majority didn’t have a plan to prevent default, so we stepped forward.”
Despite McConnell’s move to compromise, some Republicans are not on board with letting Democrats use reconciliation to raise the ceiling.
On Thursday morning, Sen. Lindsey Graham called the move “capitulation.”
“If Democrats want an expedited process to use reconciliation to raise the debt limit they can have it,” he posted to Twitter. “However, if Republicans intend to give Democrats a pass on using reconciliation to raise the debt limit – now or in the future – that would be capitulation.”
The South Carolina Republican warned it could set “a very unhealthy set of events” in motion.
“If Democrats are willing to change the rules of the Senate to avoid raising the debt ceiling through reconciliation they really don’t care and it is time for Republicans to push back,” he said in another tweet.
Biden had sought to use the issue as a political cudgel against Republicans.
“The United States is the financial rock the world looks to and trusts. Now in one cynical destructive partisan ploy — just for politics — our Republican friends are teetering on that brink here. They are threatening to boot that all away,” Biden said Wednesday at a virtual gathering with business leaders.
“Now it’s a meteor headed to crash into our economy. We should all want to stop it and stop it immediately. This shouldn’t be partisan.”
Biden made the remarks during an event where big business leaders including JPMorgan Chase CEO Jamie Dimon offered support for his stance.