U.S. Lawmakers Continue To Haggle Over Raising The Federal Debt Ceiling

U.S. Senate Democrats and Republicans are continuing negotiations aimed at averting a debt crisis after Democrats showed openness to a Republican offer to allow an extension of the federal debt ceiling into December of this year.

Democrats called off a vote after the Senate's top Republican, Mitch McConnell, floated the plan that would buy a couple of months to resolve the issue.

But it could also just kick the can down the road until late this year, when Congress faces a deadline for funding the government. Democrats also want to pass two massive spending bills that make up much of President Joe Biden's domestic agenda in the coming weeks.

Without congressional action to raise the $28.4-trillion U.S. debt limit, the Treasury Department has forecast that it will run out of ways to meet all its obligations by October 18. Republicans have blocked Democratic efforts to bring up legislation to suspend the cap.

But McConnell has suggested passing legislation to raise the debt limit by a fixed dollar amount, which he did not specify, until December.

Senate Majority Leader Chuck Schumer met with his fellow Democrats behind closed doors to discuss McConnell's idea but made no public comment. Other Democrats said they were examining the offer.

While Democrats are interested in a two-month extension of the borrowing cap, they showed little interest in another suggestion by McConnell: that they use the intervening weeks to pass a longer-debt ceiling extension through a complex process called reconciliation.

Several Democrats said this would be too complicated and risky.

Republicans, meanwhile, said they had been worried that Democrats might change a rule known as the filibuster that requires a supermajority of 60 votes for most legislation to advance, if the debt issue were not resolved.

The Senate is split 50-50 between the two political parties, which has allowed Republicans to use the filibuster to block Democratic efforts to suspend the debt limit as well as other Democratic initiatives.

But President Biden said earlier this week that Democrats would consider making an exception to the filibuster to hike the debt ceiling and defend the economy.

Several prominent economists have warned that a debt default could be catastrophic for the U.S. economy as it emerges from the COVID-19 pandemic.