Credit & Capital

McConnell Offer Appears to Lift Debt Stalemate

“We are willing to take this offer in order to stave off fiscal ruin,” a Democratic senator says.
Matthew HellerOctober 7, 2021

The U.S. Senate appeared on Wednesday to be moving toward ending its stalemate over raising the federal borrowing deficit, averting at least temporarily a debt default.

Democratic senators indicated they would accept a proposal by Senate Minority Leader Mitch McConnell to raise the debt limit until December to avoid a potential economic crisis.

“We are willing to take this offer to stave off fiscal ruin,” Sen. Christopher Murphy, Connecticut Democrat, said. “But we are all beside ourselves that the only thing Republicans are willing to do is prevent disaster for three months and put us right back in this position.”

McConnell offered to allow Democrats to vote on a short-term extension of the debt ceiling but did not lift his blockade of a longer-term increase, again demanding anew that Democrats eventually use the complicated and time-consuming reconciliation process to raise the ceiling into next year or beyond.

“This will moot Democrats’ excuses about the time crunch they created and give the unified Democratic government more than enough time to pass stand-alone debt limit legislation through reconciliation,” he said in a statement.

As The New York Times reports, the majority leader’s proposal came “after weeks of intransigence on the debt ceiling and in the face of mounting pressure from the Biden administration, Wall Street, and politically powerful interest groups.”

Some Republican senators said the possibility that Democrats might change the filibuster rules to allow themselves to raise the debt ceiling unilaterally motivated McConnell to seek a deal.

“McConnell caved,” said Sen. Elizabeth Warren, Massachusetts Democrat.

The Times said if the current stalemate does end, the Democrats will face a difficult decision in December as passing a long-term debt increase through reconciliation “could bog them down and allow Republicans ample opportunities to tag them as big spenders.”

“There would have been a global economic collapse if, in fact, the wealthiest nation on earth did not pay its debts,” Sen. Bernie Sanders said. “We’re going to pay our debts. We have two months to figure it out.”

Anna Moneymaker via Getty Images