October 7 (WNN) — Senate leaders reached an agreement Thursday on a temporary extension of the debt limit, giving lawmakers until December to deal with the crisis.
Senate Majority Leader Chuck Schumer, D.N.Y. announced the agreement on Thursday morning.
The Hill reported that a vote on the deal could come as soon as Thursday, which would increase the debt ceiling to $480 billion. According to Treasury Department estimates, this amount will push the loan limit up to December 3.
Officials had previously estimated that the government would start defaulting on financial obligations on October 18. Congress raised, raised or revised the loan limit 78 times since 1960 and never defaulted on its loans.
Senate Minority Leader Mitch McConnell confirmed a deal had been reached. He said on Wednesday he would support the extension, which would give Democrats more time to develop a long-term solution on their own.
“The Senate is moving towards the plan I laid out last night to save the American people from an unprecedented crisis,” McConnell said Thursday.
“The path our Democratic allies have taken will protect the American people from any near-term crisis.”
Conservatives could still block the deal by requiring 60 votes to push it forward, which would require the support of at least 10 Republicans—a procedural hurdle any one senator could need. Republicans have blocked several attempts by Democrats to suspend debt limits.
Sen. Lindsey Graham, R.C., spoke out against a temporary extension on Wednesday.
“I do not support the Democrats’ reconciliation package and do not support raising the debt limit to make that level of spending possible,” Graham said in a statement. “If Democrats want to raise the debt limit they can use the conciliation process.”
Democrats said they would not use reconciliation. Reconciliation bills are not subject to filibuster and would allow Democrats to push legislation without Republican support.
There is also the possibility of a change in the Senate’s filibuster rules to pass a bill to increase the debt limit.
Business leaders and the bank’s CEO joined President Joe Biden on Wednesday in an effort to raise the loan limit.
JPMorgan Chase CEO Jamie Dimon said a government default could result in “cascading effects” that could range anywhere from “recession to utter catastrophe for the global economy”.
Citi CEO Jane Fraser said defaulting on the government’s financial obligations would cause permanent damage to the United States’ credibility with investors.