Yahoo Finance McConnell, Schumer Cut a Deal to Raise the Debt Limit
Congressional leaders have agreed on a novel legislative plan that would allow Democrats to raise the debt ceiling on their own without the threat of a Republican filibuster in the Senate, according to multiple reports Tuesday. If successful, the maneuver would defuse a looming crisis over a possible debt default by the U.S. Treasury, which has warned that it could run low on cash by the middle of next week.
The plan, the product of weeks of talks between Senate Majority Leader Chuck Schumer (D-NY) and Senate Minority Leader Mitch McConnell (R-KY), would establish a one-time procedure to raise the debt limit to a specific number defined in a piece of legislation that requires just a simple majority in the Senate. The authorization for the fast-track procedure would expire after January 15.
At least 10 Republican votes in the Senate would be required to support the bill establishing the one-time procedure, but after that bill passes, the separate piece of legislation raising the debt limit could be approved with just the 51 votes provided by the 50 Democratic senators plus the tie-breaker from Vice President Kamala Harris.
McConnell began selling the plan to his Republican colleagues Tuesday as the House introduced the preliminary legislation. The House package also includes a plan to avoid billions of dollars in cuts to Medicare reimbursements that are scheduled to occur on January 1. If Congress fails to act, spending cuts defined by the Medicare sequestration and PAYGO budget deals 10 years ago will take effect, including a potential 6% reduction in payment levels for some health care providers.
The politics of the deal: The plan — which involves what Bloomberg’s Billy House and Erik Wasson call a bit of “procedural gimmickry” — would allow Republicans to say that they stuck by their vow to not provide any votes that would raise the debt ceiling. Instead, they would simply agree to allow the rule-setting bill to proceed, and Democrats can then raise the borrowing limit on their own.
“The red line is intact,” McConnell said. “The red line is that you have a simple majority, party-line vote on the debt ceiling. That's exactly where we will end up.”
Despite resistance from some in his caucus, McConnell appeared to be well on his way to finding the 10 backers he needs. After a briefing from the Kentucky Republican, several key GOP senators indicated that they would support his approach.
One feature of the plan that appeals to Republicans is that it forces Democrats to raise the debt limit on their own while naming a specific new limit, presumably somewhere well north of $30 trillion.
Sen. John Cornyn (R-TX) said the plan would enable Republicans to hold Democrats “politically accountable for racking up more debt.”
A quick vote: House Speaker Nancy Pelosi (D-CA) announced a vote on the legislative package scheduled for Tuesday. Assuming it passes, the bill would then head to the Senate, and McConnell said he could see a vote occurring as soon as Thursday.
