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There is a new offer on the table in Congress tonight — a potential pathway out of the impasse between Democrats and Republicans over raising the federal debt limit. The consequences of a default would be severe. Congressional correspondent Lisa Desjardins reports on the new offer and the possibility of it gaining traction.
There is a new offer on the table tonight, a potential pathway out of the impasse between congressional Democrats and Republicans over raising the federal debt limit. The consequences of a default would be severe. But will this new offer get any traction?
Congressional correspondent Lisa Desjardins begins there.
At the Capitol, a dizzying day. After weeks of impasse and increased concern over the debt ceiling, Senate Republican Leader Mitch McConnell told Democrats he could agree to two tailored ways to raise the debt ceiling.
Option one, he wrote, Republicans would help expedite a long-term increase if done through the budget reconciliation process, which takes 51 votes, or, two, Republicans would allow a short-term extension into December if done by the normal 60-vote process, this after another similarly vertiginous day on Wall Street, where, earlier, Goldman Sachs warned its clients there was a real risk that Congress would miss the debt ceiling deadline approaching in the next two weeks.
And the Pentagon expressed concern as well. Defense Secretary Lloyd Austin warned today that a default would seriously harm service members and risk retiree benefits.
President Joe Biden:
It's a meteor headed to crash into our economy. We should all want to stop it.
President Biden, for his part, again stressed, this is dire. Meeting with banking and other business leaders, he laid out a worst-case scenario.
Social Security benefits will stop. Salaries to service members will stop. Benefits to veterans will stop, and much more.
But the focus today was on McConnell and Democratic Senate Leader Chuck Schumer. While they negotiated in the afternoon in private, publicly, in the morning, the rhetoric had been barbed.
Sen. Mitch McConnell (R-KY):
Even now, while the Democratic leader complains that he's short on time, he continues to waste time with partisan stunts that are dead on arrival.
Sen. Chuck Schumer (D-NY):
Republican obstruction on the debt ceiling over the last few weeks has been reckless.
But, by late afternoon, a seeming breakthrough. Democrats met and told reporters they will take McConnell's offer of a short-term extension, good news for many holding their breath, like on Wall Street and for those worried about another nuclear procedural fight in the Senate, after President Biden offered this possible solution last night.
Are Democrats considering using the nuclear option to raise the debt limit, using a carve-out with the filibuster to raise the debt ceiling?
Oh, I think that's a real possibility.
In other words, that Democrats change the filibuster rules for just the debt ceiling to require 50, not 60 votes.
But that would have meant more pressure on and more pressure around Senators Kyrsten Sinema and Joe Manchin. At the end of a whirlwind day at the Capitol, a whirlwind solution to the debt crisis is in the air, but allows for another potential crisis in just weeks.
And Lisa joins me now here in the studio.
Lisa, you said it right, a dizzying day. So, tell us, where does this stand? Have they averted a crisis over the debt ceiling or not?
Here's the word. We're in a strange moment right now, Judy. Neither Senator Leader Chuck Schumer nor Republican Leader Mitch McConnell have publicly said anything about this deal, but behind the scenes, all of us are getting reporting, and I have got reporting from both sides, saying they are nearing disagreement, in fact.
And here are the details of what is on the table, where we think they are going right now. So let's look at this. This is the deal that Senator McConnell proposed. It would set a specific dollar amount for the debt ceiling to reach, and that dollar amount would also coincide roughly with sometime in December.
So, essentially, it would give about a month or two, a little over a month, two months, of grace period here. And then important to this is that, under this deal, it would require 60 votes in the Senate. It would be that sort of normal process where a filibuster would be allowed, which means, of course, that 10 Republicans would be needed.
Speaking to Republicans in all corners of the party in the Senate, they believe that will be possible, that, essentially, Senator McConnell has given them the ability to do this by saying it's a temporary deal only.
Of course, what this also means is that this entire debt ceiling fight would be kicked down the curb just until December. We're going to get to that later.
But let's talk about tonight some more. Something else that would need to happen, as we're seeing details being worked out tonight between the two leaders in the Senate, the House would, of course, have to pass this as well. The House is out of session right now. I do not think they would come back this week. They have told members they would give them three days' notice.
So the House would likely come back next week. All of this, of course, is happening as the markets have been waiting. We saw the markets react very well to this today. And I should also mention our debt right now is at $28 trillion. So, in the air is also a larger conversation about the debt itself.
But this was a crisis. And there is hope tonight that the crisis will be averted in the next day or two.
But we don't know what that next number would be that they would set for December?
No, that's right.
And it's going to be a very important point of fact, because part of this battle is all about that larger reconciliation bill. How large will that be? How much debt will that incur, if any, and sort of Republicans trying to build up some ads perhaps for next year, saying, look at how much the Democrats raise the debt.
I think, if they do a number short term, Democrats are not necessarily going to want to do that again.
A lot of speculation about why Mitch McConnell, the Senate minority leader, did this. Why did he make this offer?
We saw former President Trump today accusing him of caving, but what are you learning from people you talk to?
This is my reporting.
There were a few things in play here for Senator McConnell. One, I believe he calculated that Senator Schumer, in one of their first real face-offs together, was going to back off first. It went the other way. Democrats really stood up and called out Republicans, saying, we believe you are to blame.
Then, also, the business pressure that we saw today, obviously, real problems on Wall Street, real concern quickly, that is something that Republicans were hearing a lot from constituents and from donors, as well as business groups. And, thirdly, the filibuster. I'm told by people who were in the room and were staff to people in the room that Senator McConnell did not want to try and risk the filibuster over this issue.
He was worried that could open up other issues, perhaps voting rights, something that he's concerned about. If Senators Manchin and Sinema broke on this, maybe they would break on other things as well.
These rules that they have in the Senate.
So, Lisa, you just mentioned this reconciliation bill, this larger social spending bill that the president is negotiating right now. The Build Back Better bill is another name for it. What do we know about where that stands? We keep hearing there have been some coming together.
It is in fact the case that now Democrats are circling around that $2 trillion number, some a bit higher, like $2.5 trillion, some a bit lower, like Senator Manchin, $1.5 trillion.
But speaking even on the record today to Senators like Debbie Stabenow, who's in leadership, committee chairperson, she told me that, despite what Joe Manchin has been saying, she does think it is around that higher end of $2 trillion to $2.3 trillion. Those discussions go on.
And I think that now, raising the debt ceiling, if that discussion is pushed back, it could actually give Democrats more motivation to work a little bit faster, because they will want to pass that larger Biden bill before the debt ceiling comes up again in December.
And, by the way, also with that December deadline is the government spending deadline in December. So, while Democrats have said they want to deal with reconciliation this month, get it done by November, a lot of us have been skeptical if they could. Now this recon — this new debt ceiling deadline gives them even harder reason to really push forward and try and figure out reconciliation as soon as possible.
There's the sense that things are piling up here as we head toward the end of the year.
They absolutely are. Hold your breath for Christmastime and Thanksgiving.
We're not ready to face it yet.
Lisa Desjardins, thank you very much.
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Lisa Desjardins is a correspondent for PBS NewsHour, where she covers news from the U.S. Capitol while also traveling across the country to report on how decisions in Washington affect people where they live and work.
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