The Daily Update: Debt Ceiling Olive Branch

Senate Minority Leader Mitch McConnell yesterday held out an olive branch in a surprise offer of a short-term suspension of the U.S. debt ceiling that would avert any default and the knock-on economic fallout until Democrats are able to pass a more permanent solution before the end of the year. McConnell made the offer as the Senate was preparing to hold another vote on extending the nation's borrowing limit with little over a week before a possible debt default. Naturally, the Republicans had been set to reject the measure. The vote was cancelled, with Democrats saying they could agree to the McConnell offer.

The offer takes the pressure off both parties to agree a compromise in the next 11 days, the 18th October was the day the Treasury Department estimated it would run out of money. McConnell also said that the Republicans would also assist in advancing a reconciliation bill to lift the borrowing cap if Democratic leadership wanted to address the borrowing cap before the deadline.

Although the Democrats gave a sigh of relief at the offer, as one put it ‘We are willing to take this offer in order to stave off fiscal ruin’ he was still stewing, adding ‘we are all beside ourselves that the only thing Republicans are willing to do is prevent disaster for three months and put us right back in this position’.

However, Bernie Sanders (the Sanders that came second in the Democratic party’s nomination for president in both 2016 and 2020, if he had won in either, I think he would have been President) was more pragmatic. Now an independent, he said ‘Around here, two months is a lifetime’ adding ‘We’re going to pay our debts. We have two months to figure it out’.

Have a good day.