WASHINGTON (AP) \u2014 Senate leaders announced an agreement Thursday to extend the government\u2019s borrowing authority into December, temporarily averting an unprecedented federal default that\u2026<\/b>
\nBy KEVIN FREKING, ALAN FRAM and ALEXANDRA JAFFE WASHINGTON (AP) \u2014 Senate leaders announced an agreement Thursday to extend the government\u2019s borrowing authority into December, temporarily averting an unprecedented federal default that experts say would devastate the economy. \u201cOur hope is to get this done as soon as today,\u201d Senate Majority Leader Chuck Schumer declared. Republican leader Mitch McConnell, whose party has been blocking the debt limit extension, said, \u201cThe Senate is moving forward.\u201d The first crucial vote on the measure was set for Thursday night. Republican leaders were working to find the 10 votes they need from their party to advance the extension. John Thune of South Dakota, the second-ranking Senate Republican, said, \u201cIn the end we\u2019ll be there, but it will be a painful birthing process.\u201d In their agreement, the Republican and Democratic leaders edged back from a perilous standoff over lifting the nation\u2019s borrowing cap, with Democratic senators accepting an offer from McConnell. McConnell made the GOP offer a day earlier, just before his Republicans were prepared to block longer-term legislation to suspend the debt limit and as President Joe Biden and business leaders ramped up their concerns that a default would disrupt government payments to millions of people and throw the nation into recession. The White House signaled the president\u2019s support, with principal deputy press secretary Karine Jean-Pierre issuing a statement that the president would sign a bill to raise the debt limit when it passed Congress. Earlier, she called the short-term deal a \u201cpositive step,\u201d even as she assailed Republicans for blocking Democratic efforts. \u201cIt gives us some breathing room from the catastrophic default we were approaching because of Sen. McConnell\u2019s decision to play politics with our economy,\u201d she told reporters. Wall Street rallied modestly on the news. The agreement sets the stage for a sequel of sorts in December, when Congress will again face pressing deadlines to fund the government and raise the debt limit before heading home for the holidays. The agreement will allow for raising the debt ceiling by about $480 billion, according to a Senate aide familiar with the negotiations who spoke on condition of anonymity to discuss them. That is the level that the Treasury Department has said is needed to get to Dec.3. \u201cBasically, I\u2019m glad that Mitch McConnell finally saw the light,\u201d Bernie Sanders, the independent senator from Vermont, said late Wednesday. McConnell portrayed it differently. \u201cThe pathway our Democratic colleagues have accepted will spare the American people any near-term crisis, while definitively resolving the majority\u2019s excuse that they lacked time to address the debt limit through (reconciliation),\u201d McConnell said Thursday. \u201cNow there will be no question: They\u2019ll have plenty of time.\u201d Congress has just days to act before the Oct.18 deadline when the Treasury Department has warned it would quickly run short of funds to handle the nation\u2019s already accrued debt load. McConnell and Senate Republicans have insisted that Democrats go it alone to raise the debt ceiling. Further, McConnell has insisted that Democrats use the same cumbersome legislative process called reconciliation that they used to pass a $1.9 trillion COVID-19 relief bill and have been employing to try to pass Biden\u2019s $3.5 trillion measure to boost safety net, health and environmental programs. McConnell said in his offer Wednesday that Republicans would still insist that Democrats use the reconciliation process for a long-term debt limit extension. However, he said Republicans are willing to \u201cassist in expediting\u201d that process, and in the meantime Democrats may use the normal legislative process to pass a short-term debt limit extension with a fixed dollar amount to cover current spending levels into December. Sen. Lisa Murkowski, R-Alaska, said she\u2019d be among those voting to advance the bill. \u201cI\u2019m not willing to let this train go off the cliff,\u201d she said. On Wednesday, Biden enlisted top business leaders to push for immediately suspending the debt limit, saying the approaching deadline created the risk of a historic default that would be like a \u201cmeteor\u201d that could crush the economy and financial markets. At a White House event, the president shamed Republican senators for threatening to filibuster any suspension of the $28.4 trillion cap on the government\u2019s borrowing authority. He leaned into the credibility of corporate America \u2014 a group that has traditionally been aligned with the GOP on tax and regulatory issues \u2014 to drive home his point as the heads of Citi, JP Morgan Chase and Nasdaq gathered in person and virtually to say the debt limit must be lifted. \u201cIt\u2019s not right and it\u2019s dangerous,\u201d Biden said of the resistance by Senate Republicans. His moves came amid talk that Democrats might try to change Senate filibuster rules to get around Republicans. But Sen. Joe Manchin, D-W. Va., reiterated his opposition to such a change Wednesday, likely taking it off the table for Democrats. The business leaders echoed Biden\u2019s points about needing to end the stalemate as soon as possible, though they sidestepped the partisan tensions in doing so. Each portrayed the debt limit as an avoidable crisis. \u201cWe just can\u2019t wait to the last minute to resolve this,\u201d said Jane Fraser, CEO of the bank Citi. \u201cWe are, simply put, playing with fire right now, and our country has suffered so greatly over the last few years. The human and the economic cost of the pandemic has been wrenching, and we don\u2019t need a catastrophe of our own making.\u201d Ahead of the White House meeting, the administration warned that if the borrowing limit isn\u2019t extended, it could set off an international financial crisis. \u201cA default would send shock waves through global financial markets and would likely cause credit markets worldwide to freeze up and stock markets to plunge,\u201d the White House Council of Economic Advisers said in a new report. \u201cEmployers around the world would likely have to begin laying off workers.\u201d 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. ___ AP Writers Lisa Mascaro and Josh Boak in Washington and AP Business Writer Damian J. Troise in New York contributed to this report.<\/p>\n