The past two weeks have underscored one thing: both sides want to avoid defaulting on debt.
When the debt ceiling expires in December, things will likely be fine, just like in October.
Plus, the United States might have a longer window to act next time around.
Congress is on the verge of barely avoiding a default this month, with Republicans and Democrats reaching a deal to extend the debt limit in what will amount to a two-month truce.
The agreement sets up a new confrontation over the country’s ability to reimburse its bills in early December, a battle that will be coupled with government funding. It threatens to block Democrats as they strive to push President Joe Biden’s economic agenda across the finish line, drawing on their slim majorities.
Still, there’s a good chance the United States will continue to avoid a default that experts say will cut Social Security payments, disrupt financial markets and jeopardize the global economy. Despite the intense political stance, the events of the past two weeks have underscored one thing: Neither Republicans nor Democrats want to see the nation plunged into yet another economic crisis.
“The debt limit is going to be increased,” Senator Mitt Romney of Utah told Insider earlier in the week. “Republicans want it increased. Democrats want it increased.”
“There has never been a danger of the United States defaulting on its debt,” Pennsylvania Senator Pat Toomey at the same time told Insider.
Congress may have longer window for December showdown
Senate Republicans led by Kentucky Minority Leader Mitch McConnell had blocked Democrats’ attempts to lift the debt ceiling, even as the clock ticked and the United States moved closer to a fiscal abyss. The GOP obstruction has stepped up calls among Democrats to blow up a hole in the obstruction – the 60-vote threshold most bills must cross – if it means averting disaster.
The prospect of Democrats harming the filibuster and unilaterally forcing an extension led McConnell to propose a two-month debt limit extension to Senate Majority Leader Chuck Schumer. Eleven Senate Republicans ultimately voted to pave the way for the final passage of a debt limit extension, including McConnell.
Democrats have expressed some concern about congressional priorities creating a traffic jam for the legislature. Republicans are “absolutely trying to slow down the legislative agenda and make it harder to get things done,” Senator Debbie Stabenow of Michigan told Insider.
As Republicans drop their demands that Democrats use the party line reconciliation process, Schumer insisted the GOP must share the burden in December.
“For the sake of American families, for the sake of our economy, Republicans must recognize in the future that they should approach debt limit setting in a bipartisan fashion,” Schumer said in a ground speech that was condemned by Republicans. “We hope the Republicans will join the passage of a long-term solution to the debt limit in December.”
Yet even if Republicans and Democrats fail to come to an agreement on a debt limitation deal by December 3, they may have a longer window to act before the United States again collides with fiscal ruin. Donald Schneider, former GOP personnel economist on the House Ways and Means committee, projected that the Treasury Department could launch emergency liquidity conservation measures to fund US debt until early February.
Read the original article on Business Insider