Lawmakers reach deal on short-term debt ceiling increase, Schumer

Senate Majority Leader Chuck Schumer announced Thursday morning that lawmakers have reached a deal on a short-term debt ceiling increase after hours of discussion with GOP leader Mitch McConnell.

“I have some good news,” Schumer, D-N.Y., said from the Senate floor. “We have reached agreement to extend the debt ceiling through early December, and it’s our hope that we can get this done as soon as today.”

The agreement allows the debt limit to increase by $480 billion, according to people familiar with the deal, a sum the Treasury Department estimates will allow it to pay bills until Dec. 3. The current national debt is about $28.4 trillion and would be permitted to rise to about $28.8 trillion under the deal.

Investors appeared relieved that the U.S. would stave off default. Stocks rose after the news. The Dow Jones Industrial Average was up 486 points as of 11:25 a.m. ET, while the S&P 500 rallied 1.3%.

The announcement from the Senate’s top Democrat came less than a day after Minority Leader McConnell, R-Ky., offered a stopgap solution to avert a looming government default and subsequent economic downturn. The Senate is expected to vote on the Schumer-McConnell proposal later Thursday.

Republicans and Democrats had been at odds for weeks over how to raise or suspend the U.S. borrowing limit by Oct. 18, when the Treasury Department estimates the country will exhaust its emergency measures to pay the nation’s bills.

The U.S. has never defaulted on its debt, and most economists predict that doing so would lead to a recession and violent swings in financial markets.

Republicans, frustrated by what they see as reckless spending initiatives from the Biden administration, had until Wednesday threatened to filibuster any debt-ceiling legislation brought to the Senate under normal procedures.

Instead, the GOP had pressed Democrats to pass a solution via budget reconciliation, which would save Republicans from voting to increase the nation’s borrowing limit.

McConnell made that point clear in unveiling his offer on Wednesday.

“We will also allow Democrats to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December,” he wrote. “This will moot Democrats’ excuses about the time crunch they created and give the unified Democratic government more than enough time to pass standalone debt limit legislation through reconciliation.”

President Joe Biden spent much of his week categorizing Republicans as obstructers, saying that their threat to filibuster made efforts to hike or suspend the debt limit needlessly complicated.

The president on Monday called the GOP’s behavior “hypocritical, dangerous and…