McConnell offers Democrats a 2-month lift of the debt ceiling, preventing default until then

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mitch mcconnell
Senate Minority Leader Mitch McConnell. Alex Wong/Getty Images
  • Mitch McConnell on Wednesday offered Democrats a two-month reprieve on the debt ceiling.

  • Even if they took his offer, McConnell insisted they would have to raise it via reconciliation.

  • It would prevent a mid-October default, but one Democrat immediately criticized the offer.

  • See more stories on Insider's business page.

Senate Minority Leader Mitch McConnell is offering Democrats a two-month lift of the debt ceiling, which would prevent a default on the national debt until December, the Republican senator said in a statement Wednesday.

He had previously been adamant that Democrats would have to raise the debt ceiling along party lines, which, given his opposition, is possible only via the time-consuming procedure known as reconciliation. His statement made clear that this offer would just delay that until December.

"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," he said.

The offer marks the first concession in the standoff between Democrats and Republicans over the debt crisis. For weeks, Senate Republicans were adamant that Democrats would have to raise the ceiling on their own. Democrats said the GOP should support the measure, as it would finance the spending approved under the Trump administration.

Still, McConnell's offer would only delay a showdown. Democrats will be pressured to raise or suspend the limit again before December, and they have few options. Senate Majority Leader Chuck Schumer has repeatedly pushed back against using reconciliation, a process that would allow 50 Democrats to raise the ceiling on their own.

Some Democrats were very underwhelmed by McConnell's proposition. Sen. Mazie Hirono of Hawaii told reporters it was a "bullshit" offer.

Sen. Mark Warner, a Democrat of Virginia, said he believed there was some "hypocrisy" in McConnell's offer, which could jam Democrats around the holidays as they try to enact President Joe Biden's economic agenda.

"This is one of the reasons the whole fiasco around the debt ceiling should be removed, no matter who's in charge," he told Insider.

Democrats set an October 30 deadline to approve their social-spending bill, but it's possible that passage could slip after that.

The new deadline also lands close to the date that government funding is set to run out. Lawmakers' recent funding bill keeps the government open only until December 3. If Congress can't approve a debt-ceiling fix or a new funding measure, the US may default on its debt and shut down before the end of the year.

"That's always a fear here," Sen. Dick Durbin of Illinois, the second-ranked Senate Democrat, told Insider. "You leave too much for one at the end of the year."

Asked if McConnell was trying to jam Congress with a lot of priorities to tackle at once with his offer, Sen. Chris Coons of Delaware said "of course."

If anything, McConnell's offer would only delay the inevitable, Alec Phillips, a Goldman Sachs economist, said in a note. It would force Democrats to lift the ceiling to $29 trillion in the next few days and to $31 trillion a few months later. The latter effort would most likely require the complex reconciliation process, he added.

"The only thing harder than increasing the debt limit is increasing it twice," Phillips wrote. "This should not be interpreted as a compromise and it might not change the situation."

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