US Senate leaders Thursday afternoon (7/10) managed to reach an agreement to increase the government debt ceiling until early December. The deal would prevent what could be the first failure to meet America’s debt obligations, which are due on October 18.
Senate Majority Leader Chuck Schumer announced the deal in the Senate after talks with Republican leader Mitch McConnell.
Last Wednesday (5/10) he proposed to Democrats to increase America’s current total long-term debt by an unspecified amount of $28.4 trillion to cover government spending through December, when the issue should be re-discussed.
Schummer hopes to win Congressional approval of the increase in the debt ceiling Thursday afternoon, but has not provided details on the debt levels approved by members of Congress or other terms of the deal.
The media reported that the increased debt ceiling was extended to December 3 and allowed the government to borrow another 480 billion dollars.
Congress’s disapproval of raising the debt ceiling has intensified in recent days as the October 18 due date approaches, at which time Treasury Secretary Janet Yellen said the government would run out of enough money to pay all its bills because it used more of its budget than it collected through taxes. Payment of monthly pensions for senior citizens, salaries of civil servants and federal contractors may be delayed. But what is most worrying if America fails to keep up with its debts is the economic chaos in the country with the largest economy in the world and its impact on the rest of the world.
Republicans Won’t Vote
Republicans have said they will not vote to help Democrats raise the debt ceiling, in part to show opposition to the government’s two trillion dollar social watch net program. Democrats say the new budget will be paid for in full by imposing higher taxes on wealthy companies and individuals, which Republicans also oppose.
Senator Bernie Sanders welcomed McConnell’s move to prevent a deadlock over the debt ceiling. Republicans “finally did the right thing and at least we have a few more months to reach a permanent solution,” he said.
McCOnnell said the Democrats, who control the Senate, should use the reconciliation process to overcome the debt ceiling. Reconciliation is a maneuver in parliament that allows certain budget laws to be passed by a simple majority, rather than by 60 votes, in the Senate. Based on the reconciliation, the Democrats do not need Republican votes. [em/lt]