Democrats, Republicans say they've reached deal to avert another debt ceiling crisis

Top Democrats and Republicans signaled Tuesday they had clinched a deal to raise the country’s debt ceiling, settling on a complicated legislative maneuver to help them stave off another highstakes battle and prevent the U.S. government from experiencing a catastrophic default.

The apparent compromise arrived eight days before a critical fiscal deadline, averting what would have been another political and economic crisis. Senate Majority Leader Charles Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky., each expressed a measure of confidence that they had the votes to proceed, while Speaker Nancy Pelosi, D-Calif., put the House on track to adopt the measure Tuesday evening.

“We feel very good about where we are headed,” Schumer told reporters at a news conference, even as he acknowledged it is “not done until it’s done.”

The debt ceiling refers to the statutory limit under which the U.S. government can borrow money to pay its bills. Unless Congress raises it by a specific amount or suspends it outright, the Treasury Department would not be able to meet its financial obligations – and the country could experience a financial calamity, potentially even a new recession.

The U.S. government has nearly $29 trillion in outstanding debt subject to the limit. At the current rate, the Treasury Department says the country has until Dec. 15 before it again is at risk of exceeding the cap. Absent a fix, Treasury Secretary Janet Yellen has warned Congress there are “scenarios in which Treasury would be left with insufficient remaining resources to continue to finance the operations of the U.S. government beyond this date.”

The United States has never defaulted, even though partisan battles repeatedly have pushed the country to the cliff – including a protracted stalemate that brought the Senate to the precipice of crisis earlier this fall. McConnell and his Republican allies sought to withhold their votes at the time on an increase to the debt ceiling as part of their campaign to oppose President Joe Biden’s broader economic agenda. But the GOP ultimately worked out a deal with Democrats, averting a fiscal catastrophe.

In the aftermath, McConnell swore that Republicans would not lend their support again. That raised the prospects of another clash in the Senate, since Democrats have only a tiebreaking, 51-vote majority in a chamber where they need 60 to take most action. Schumer, meanwhile, refused to invoke a special legislative maneuver to address the debt ceiling without the GOP, arguing that any solution should be bipartisan.

Under the emerging deal, though, the two sides believe they have found a way out of that logjam that delivers them both a political win.

First, Congress would pass a measure that allows Democrats to raise the debt ceiling just once using a simple majority in the Senate. At least 10 Republicans would have to support that measure for it to prevail. Then, Democrats alone could forge ahead with the actual increase to the debt ceiling, which

GOP lawmakers could oppose without risking an economic crisis.