Deal reached to extend debt ceiling until December, Schumer says

WASHINGTON — Senate Majority Leader Chuck Schumer said Thursday that Senate leaders have reached a short-term deal to lift the debt ceiling, averting a government debt default until at least December.

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“We have reached an agreement to extend the debt ceiling through early December,” Schumer, D-N.Y., said. “It’s our hope that we can get this done as soon as today.”

A Senate aide told The New York Times that the deal reached Thursday will raise the legal debt cap by $480 billion. The Treasury Department estimates those funds would be enough to allow the government to continue borrowing until Dec. 3, the newspaper reported.

The debt ceiling is the limit set on the amount of money the U.S. government is allowed to borrow to meet existing legal obligations, such as Social Security and Medicare benefits, military salaries and more.

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Treasury Secretary Janet Yellen warned last month that the government faced the possibility of defaulting on its obligations for the first time in history if Congress failed to raise the debt limit before Oct. 18. In an op-ed published by The Wall Street Journal, Yellen said that a failure to lift the debt ceiling “would produce widespread economic catastrophe.”

Senate Minority Leader Mitch McConnell, R-Ky., put forward the idea of a short-term extension of the debt ceiling on Wednesday. It came after Republicans fought bipartisan efforts to raise the nation’s borrowing limit, with McConnell urging Democrats to raise the debt ceiling on their own. Democrats previously tried to extend the debt limit through 2022 as part of a spending bill aimed at preventing a government shut down.

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Announcing his willingness to negotiate a short-term deal Wednesday, McConnell said, “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.”

Once a routine matter, raising the debt limit has become politically treacherous over the past decade or more, used by Republicans, in particular, to rail against government spending and the rising debt load.

“Basically, I’m glad that Mitch McConnell finally saw the light,” said Bernie Sanders, the independent senator from Vermont. The Republicans “have finally done the right thing and at least we now have another couple months in order to get a permanent solution.”

Sen. Chris Murphy, D-Conn., added that, assuming final details in the emergency legislation are in order, “for the next three months, we’ll continue to make it clear that we are ready to continue to vote to pay our bills and Republicans aren’t.”

The Associated Press contributed to this report.