Saturday, October 23, 2021

Senate dodges US debt distress and votes to spend on loans

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The Senate dodged a U.S. debt disaster Thursday night, voting to extend the government’s borrowing authority into December and temporarily avert an unprecedented federal default that experts warned would devastate the economy and harm millions of Americans.

That debate will take place as lawmakers also work to fund the federal government for the new fiscal year and as they keep up their bitter battling over President Joe Biden’s top domestic priorities — a bipartisan infrastructure plan with nearly $550 billion in new spending as well as a much more expansive, $3.5 trillion effort focused on health, safety net programs and the environment.

The vote of 50-48 in support of the bill to raise the government’s debt ceiling by nearly a half-trillion dollars brought instant relief in Washington and far beyond. However, it provides only a reprieve. Assuming the House goes along, which it will, Republican and Democratic lawmakers will still have to tackle their deep differences on the issue once more before yearend.

Easing the crisis at hand — a disastrous default looming in just weeks — the Republican Senate leader, Mitch McConnell of Kentucky, offered his support for allowing a short-term extension of the government’s borrowing authority after leading solid GOP opposition to a longer extension. He acted as Biden and business leaders ramped up their concerns that a default would disrupt government payments to millions of Americans and throw the nation into recession.

“I can’t vote to raise this debt ceiling, not right now, especially given the plans at play to increase spending immediately by another $3.5 trillion,” Sen. Mike Lee of Utah said shortly before the vote.

The GOP concession to give up its blockade, for now, was not popular with some members of McConnell’s Republican caucus, who complained that the nation’s debt levels are unsustainable.

Sen. Ted Cruz of Texas said the Democrats had been on “a path to surrender” on the process used to lift the debt cap, “and then, unfortunately, yesterday, Republicans blinked.”

But Sen. Lisa Murkowski of Alaska was among those voting to end debate and allow a vote on the bill.

“I’m not willing to let this train go off the cliff,” she said. Eleven Republicans voted to end the debate, providing the threshold needed to move the bill to a final vote. However, no Republicans sided with Democrats in the final vote for the measure. McConnell has insisted that the majority party will have to increase the debt ceiling on its own.

Congress has just days to act before the Oct. 18 deadline after which the Treasury Department has warned it will quickly run short of funds to handle the nation’s already accrued debt load. The House is likely to return to approve the measure next week.

Republican leaders worked through the day to find the 10 votes they needed from their party to advance the debt limit extension to a final vote, holding a private huddle late in the afternoon. It was a long and “spirited” discussion in the room, said Sen. Josh Hawley of Missouri. McConnell allowed for an airing of all views and ultimately told the senators he would be voting yes to limit debate.

The vote started with McConnell and South Dakota Sen. John Thune, the second-ranking Republican, waiting patiently as slowly, but surely, nine of their GOP colleagues came and gave the anticipated thumbs up. When Cruz voted no, McConnell joked: “I thought you were undecided. Thanks for showing up.” The White House signalled Biden’s support, with principal deputy press secretary Karine Jean-Pierre saying the president would sign a bill to raise the debt limit when it passed Congress. Jabbing the Republicans, she also 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.”

Wall Street rallied modestly Thursday on news of the agreement. The accord sets the stage for a sequel of sorts in December when Congress will again face pressing deadlines to fund the government and raise the debt limit before heading home for the holidays.

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