(CNN) – The US House of Representatives passed the bill that extends the debt limit until early December. The vote was 219-206.
The Senate has already approved the interim measure to avoid a default and will now be sent for the signature of President Joe Biden. Senate Majority Leader Chuck Schumer announced last week that an agreement had been reached on the debt limit. A source familiar with the negotiations told CNN that the deal is to raise the cap by $ 480 billion, which is what the Treasury Department told Congress it would need to go through Dec. 3.
Treasury Secretary Janet Yellen has warned lawmakers that the federal government will likely run out of money by Oct. 18, unless Congress raises the debt ceiling, setting a ticking clock. -tac and it’s up for grabs.
Congress may not even have that much time to act, as the deadline is more of an estimate than a fixed deadline. This dynamic intensifies pressure on Democrats and Republicans to reach an agreement on the debt limit.
But the temporary extension of the debt limit is only a short-term fix and sets up another possible fiscal crisis looming later this year, when it runs out.
How was an agreement reached?
After weeks of partisan stalemate, Senate Majority Leader Chuck Schumer announced last week that an agreement on the debt limit had been reached, paving the way for the Senate to vote to approve the agreement. An adviser familiar with the negotiations told CNN that the deal raises the limit by $ 480 billion. It’s the amount the Treasury Department told Congress it would need to get to December 3.
The deal’s announcement came a day after Senate Minority Leader Mitch McConnell publicly presented a debt ceiling proposal as an offer to Democrats, a move that triggered negotiations between the two parties to reach a an agreement.
House Majority Leader Steny Hoyer issued a statement following the Senate’s approval of the provisional bill stating that the House would meet on Tuesday to retake and approve the measure.
Why is there still a crisis
The problem is that the dispute between the two parties on how to address the issue has not been resolved and will have to act in a few weeks to avoid the crisis again.
Republicans have insisted that Democrats must act alone to address the debt cap through a process known as budget reconciliation. Democrats have argued that the issue is a bipartisan responsibility. So far they have largely ruled out the possibility of using reconciliation. They argue that the process is too long and unwieldy and that the risk of miscalculation would be too high.
McConnell sent a letter to Biden late last week with a warning. “I am writing to inform you that I will not give you that help again if your government, fully Democratic, is headed for another avoidable crisis,” he wrote.
“I will not participate in any future efforts to mitigate the consequences of Democratic mismanagement. His lieutenants on Capitol Hill now have the time they said they lacked to address the debt ceiling through independent reconciliation, and all the tools to do it. They can’t invent another crisis and ask me for help, “McConnell wrote.
Raising the stakes even further, lawmakers will also have to deal with the expiration of government funding in the same time frame as the debt cap after separately passing a short-term extension to avoid a shutdown that only lasts until December 3.
CNN’s Kristin Wilson, Annie Grayer and Matt Egan contributed.