Mitch McConnell offers short-term debt ceiling extension following pressure from Biden

U.S. Senate Minority Chief Mitch McConnell speaks with reporters on the U.S. Capitol in Washington, August 3, 2021.

Kevin Lamarque | Reuters

Senate Minority Chief Mitch McConnell on Wednesday provided a short-term suspension of the U.S. debt ceiling to avert a nationwide default and financial disaster till Democrats are in a position to cross a extra everlasting answer earlier than the tip of the 12 months.

“To guard the American folks from a near-term Democrat-created disaster, we will even enable Democrats to make use of regular procedures to cross an emergency debt restrict extension at a hard and fast greenback quantity to cowl present spending ranges into December,” he stated in an announcement posted to Twitter.

“It will moot Democrats’ excuses concerning the time crunch they created and provides the unified Democratic authorities greater than sufficient time to cross standalone debt restrict laws by means of reconciliation,” the Kentucky Republican added.

The event got here as President Joe Biden and Democratic leaders in Congress amped up stress on Republicans to behave on the debt restrict.

The stopgap supply from McConnell would take some stress off each events to achieve a compromise by Oct. 18, when the Treasury Division estimates the U.S. will in any other case exhaust its emergency efforts to pay the federal government’s payments.

Republicans and Democrats have clashed in current weeks over how finest to lift or droop the federal borrowing restrict and it was not instantly clear if Home Speaker Nancy Pelosi, D-Calif., or Senate Majority Chief Chuck Schumer, D-N.Y., can be open to McConnell’s potential plan.

McConnell and Schumer are set to fulfill later Wednesday, in accordance with Texas Republican Sen. John Cornyn, which may result in higher readability on a doable settlement.

Through the previous week, the White Home has considerably ratcheted up stress on Republicans in Congress. 

On Monday, Biden stated Republicans’ refusal to hitch Democrats in voting to droop the debt restrict was “hypocritical, harmful and disgraceful,” particularly after they voted a number of occasions to take action throughout former President Donald Trump’s 4 years in workplace. 

“Not solely are Republicans refusing to do their job, however they’re threatening to make use of their energy to stop us from doing our job — saving the financial system from a catastrophic occasion,” Biden stated. 

On Wednesday, Biden stated a lot the identical factor throughout a White Home occasion with Fortune 50 CEOs, centered on the dire penalties of a credit score default. 

As that assembly was underway on the White Home, on Capitol Hill, McConnell was proposing his quick time period repair plan to members of his caucus. 

If Democrats settle for McConnell’s supply, as they’re anticipated to, the GOP chief may have successfully blunted the chief line of assault from Democrats: That Republicans have been standing in the way in which whereas Democrats labored to keep away from a catastrophic default.

CNBC’s Ylan Mui contributed reporting.

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