On Oct. 7, The U.S. Senate agreed, as expected, to a provisional increase in the national debt ceiling until December 3.
“I have some good news,” majority leader Chuck Schumer said from the Senate floor. “We have reached [an] agreement to extend the debt ceiling through early December, and it’s our hope that we can get this done as soon as today.”
The agreement was announced after Democrats and Republicans in the Senate voted. 50 votes were cast in favor of raising the debt ceiling and 48 voted against.
The debt ceiling will be raised by $480 billion so that the federal government will be able to meet its payment obligations until December 3. The total national debt will thus be increased from 28.4 to 28.8 trillion.
The deal comes less than two weeks before October 18, the date the U.S. would have defaulted on its debt payments.
“We have reached an agreement to extend the debt ceiling until early December, and we hope to do so as soon as possible today,” Schumer said on the Senate floor on Thursday.
Schumer’s announcement comes less than a day after Senate Majority Leader Mitch McConnell (R-Ky.) offered Democrats a deal to avoid a government default.
“We will also allow Democrats to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December,” McConnell wrote on Wednesday, adding that, “This will moot Democrats’ excuses about the time crunch they created and give the unified Democratic government more than enough time to pass standalone debt limit legislation through reconciliation.”
McConnell’s proposal included two options, either raising the short-term debt limit until December or accelerating the suspension of the debt limit using the budget reconciliation process, which Democrats have so far objected to.
Both Democrats and Republicans have contributed to the skyrocketing national debt over the past few decades, and the only remedy they can think of is to borrow even more money resulting in the national debt going up even further.
The only difference of opinion between Democrats and Republicans is the rate at which the debt should increase. Republicans are generally more moderate and accuse the Biden administration of being too ambitious in its spending.
It is believed the House of Representatives will follow suit. A majority of the members promised to vote for the bill on Tuesday, October 12.
“Treasury Secretary Janet Yellen said that if the House fails to act next week, the country will be unable to pay its bills. This cannot happen,” he added, “Therefore, the House will convene on Tuesday, October 12, to pass this stopgap measure, and I expect we will complete our work that evening.”
This gives some room for the congressmen until December. However, as several analysts at Height Capital Markets said in a note, “The debt extension just kicks the can to December when Congress will have to address the debt ceiling again.”