Senate Minority Leader Mitch McConnell on Wednesday proposed postponing the U.S. debt ceiling in the short term to prevent national insolvency and the economic crisis until Democrats can find a more sustainable solution by the end of the year.
The development began when President Joe Biden and Democratic leaders in Congress increased the pressure on Republicans to stick to the debt limit.
The offer of Senate McConnell’s suspension would put pressure on both sides to reach a compromise by October 18, when the Treasury Department estimates that the United States would otherwise end its urgent efforts to pay the state bills.
McConnell reiterated Wednesday that the Senate GOP Democrats will also help speed up the conciliation law to increase the credit limit if Democrat leadership wants to address the credit limit by the October deadline.
House spokesman Jen Psaki on Wednesday gave cool comments on McConnell’s proposal.
“In my opinion, no formal offer has been made, the press release is not a formal offer. And independently, even a few reported details are more complex and difficult options than fairly clear,” Psaki said.
Most economists say U.S. insolvency means an economic disaster, and Treasury Secretary Janet Yellen warned Tuesday that she expects a full-blown recession. Biden told him Wednesday that the insolvency “will lead to injuries that threaten market stagnation and destruction, such as savings and expensive jobs.”
Republicans and Democrats have been debating in recent weeks how best to raise or lower the federal credit line, and it was not immediately clear whether House Speaker Nancy Pelosi, D-California, as a Senate Majority Chuck Schumer DN.Y. is open to a possible McConnell plan.
Representatives of Pelosi and Schumer did not immediately respond to a request for comment.
McConnell and Schumer will meet later Wednesday, Texas Republican Senator John Corny said in Texas, which could lead to greater clarity about a possible deal.
The White House put a lot of pressure on Republicans last week.
Biden said Monday that Republicans’ refusal to join Democrats in ending the debt line was “hypocritical, dangerous and shameful,” especially since they repeatedly voted for former President Donald Trump for four years.
“Republicans are not only refusing to do their job but threatening to use their powers to stop us doing their job – to save the economy from a catastrophic event,” Biden said.
On Wednesday, Biden spoke at the same event in the White House with the CEOs of Fortune 50, focusing on the serious consequences of credit risk.
Despite Psak’s comments on Wednesday afternoon, the White House is likely to delay official approval as a rejection of Schumer and Pelosi.
Although it is unclear how the Republican proposals came together, Biden said Monday that he plans to talk to Senate McConnell in the coming days.
Biden and McConnell have maintained a long-standing relationship of mutual respect in the Senate, which has been built over decades. During the Obama administration, Biden was an informal ally between the Obama White House and the Republican-controlled Senate.
If Democrats accept McConnell’s offer, the GOP leadership will effectively make the Democratic main attack gloomy: Republicans will block the road, while Democrats will try to prevent catastrophic insolvency.
If Democrats approve this agreement, they will also want to increase the debt ceiling – not suspend it – through a mediation law. The suspensions allow the government to flood new debt for a certain period instead of limiting it to a certain dollar.
Politicians often want to surrender because it looks better for an election.
Democrats are likely to raise the ceiling to $ 30 trillion if North. And while Republicans and Democrats are responsible for the total debt, raising that limit makes Democrats vulnerable to non-discriminatory, debt-financed spending by mid-2022.