Se­nate debt-ceil­ing talks end with­out progress

Dead­line to raise limit is Sept. 29; vote on mea­sure could come down to wire

The Denver Post - - NATION & WORLD - By Damian Paletta

The Se­nate and House have 12 joint work­ing days be­fore Sept. 29, when the Trea­sury Depart­ment says it would no longer be able to pay all of the gov­ern­ment’s bills un­less Congress acts. A de­fault would likely set off a ma­jor dis­rup­tion to the world fi­nan­cial sys­tem, with a stock mar­ket crash and surg­ing in­ter­est rates that could send the econ­omy into a re­ces­sion.

Trea­sury Sec­re­tary Steven Mnuchin has urged Congress for months to raise the debt limit, but the White House has lacked a uni­fied mes­sage and run into re­sis­tance on Capi­tol Hill, where Democrats and Repub­li­cans are at odds on key tax and spend­ing is­sues.

Mnuchin met Tues­day morn­ing with Se­nate Ma­jor­ity Leader Mitch McCon­nell, R-Ky., and Se­nate Mi­nor­ity Leader Charles Schumer, D-N.Y., search­ing for ways to raise the debt ceil­ing, but the gath­er­ing ended with­out any progress — or even a clear sense of what the law­mak­ers needed to de­liver votes to raise the limit.

The White House had im­plored Congress to raise the debt ceil­ing be­fore the Au­gust re­cess, but law­mak­ers showed lit­tle sign of en­gag­ing. The House of Rep­re­sen­ta­tives has left town and will not re­turn un­til af­ter La­bor Day.

The U.S. gov­ern­ment spends more money than it brings in through rev­enue, cre­at­ing an an­nual deficit. The Trea­sury Depart­ment bor­rows money to cover that gap by is­su­ing debt, and it has al­ways paid back the bond­hold­ers on time. Ac­cord­ing to one mea­sure­ment, the gov­ern­ment now has close to $20 tril­lion of debt.

Congress has es­tab­lished a cap on the amount of money the gov­ern­ment can bor­row, and Mnuchin has told Congress that this cap must be raised by Sept. 29 to en­sure he can con­tinue pay­ing all of the gov­ern­ment’s bills.

Repub­li­cans of­ten re­sist ef­forts to raise the debt ceil­ing, mak­ing GOP lead­ers rely on Democrats to help them get enough votes to pass the bill. But sub­stan­tive talks on how to raise the debt ceil­ing have not be­gun, and the break­down at the Mnuchin meet­ing on Tues­day sug­gests a vote on the mea­sure could come down to the wire late next month.

Some Repub­li­cans, even some within the White House, have sug­gested there should be spend­ing cuts that ac­com­pany any agree­ment to raise the debt ceil­ing.

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