House of Representatives approves extension of debt ceiling to early December

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Now the Democratic-controlled House of Representatives has passed a short-term extension that can be signed by President Joe Biden.

Treasury Secretary Janet Yellen has warned lawmakers that unless Congress raises the debt ceiling, sets a ticking clock and high stakes, the federal government may run out of cash before October 18.

Congress may not even take that long to act, because deadlines are more of a best guess than a fixed deadline. This dynamic has increased the pressure on Democrats and Republicans to reach an agreement to resolve the debt limit issue.

But the extension of the temporary debt limit is only a short-term solution, and will trigger another imminent potential financial crisis when it expires later this year.

How to make a deal

After weeks of partisan stalemate, Senate Majority Leader Chuck Schumer announced a debt limit agreement last week, paving the way for the Senate to vote for the agreement. An assistant familiar with the negotiations told CNN that the agreement raised the upper limit by $480 billion, which is the amount that the Treasury Department told Congress to reach by December 3.

The announcement of the transaction came the day after Senate Minority Leader Mitch McConnell publicly proposed a debt ceiling proposal as a proposal to the Democrats, which triggered negotiations between the two parties to reach an agreement.

House Majority Leader Stanney Hoyer issued a statement after the Senate passed the expedient bill, stating that the House of Representatives will meet on Tuesday to adopt and pass the measure.

The House of Representatives did not vote separately to approve the extension of the debt ceiling. Instead, when the House of Representatives voted to approve a live debate rule on three independent measures on Tuesday night, the extension was passed. Complicated procedural strategies mean that legislators are uncomfortable with a tough vote to raise the debt limit and do not have to directly vote for it.

Why the crisis is still looming

The problem is that the dispute between the two parties on how to resolve the issue has not been resolved, and action needs to be taken in just a few weeks to avoid the crisis again.

Republicans have always insisted that Democrats must act alone to resolve the debt ceiling through a process called budget reconciliation. Democrats believe that this issue is the responsibility of both parties. So far, they have largely rejected the possibility of using reconciliation, believing that the process is too long and awkward, and the risk of misjudgment is too high.

McConnell wrote to Biden last weekend and issued a warning. “I am writing to inform you that if your All-Democratic Government is in another avoidable crisis, I will no longer provide such assistance,” he wrote.

“I will not participate in any future efforts to mitigate the consequences of Democratic mismanagement. The deputies on Capitol Hill now have time to claim that they lack the time and all the tools to resolve the debt ceiling through an independent settlement. They cannot create another. A crisis and seek my help,” McConnell wrote.

To increase the stakes, legislators must also deal with the maturity of government funds within the same time frame as the debt limit after passing a short-term extension alone to avoid a shutdown that only lasts until December 3.

This story and title have been updated with other developments on Tuesday.

CNN’s Anne Greer and Matt Egan contributed.

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