Mitch McConnell expected to offer short-term deal to raise debt ceiling

Senate GOP leader Mitch McConnell is set to offer Democrats an agreement on raising the U.S. debt ceiling through November, alleviating the immediate risk of a default, according to a person familiar with the plan.

The proposal would push back the partisan confrontation over the debt ceiling but not resolve it. It would increase the ceiling by a dollar amount that would be sufficient to tide the Treasury over until December, the person said.

Senate Majority Leader Chuck Schumer plans to hold a procedural vote Wednesday to advance a bill that would suspend the debt ceiling until December 2022. Republicans are expected to block it.

McConnell is demanding Democrats raise the debt limit using a more cumbersome process known as reconciliation that is being employed for legislation to enact much of President Joe Biden’s agenda and exempts it from any GOP filibuster.

Schumer has said there isn’t enough time to use reconciliation, but a short-term increase in the ceiling would provide that time.

Treasury Secretary Janet Yellen projects that the U.S. will reach its limit on sovereign debt on about Oct. 18. The Bipartisan Policy Center think tank on Wednesday put the estimated date of a payment default between Oct. 19 and Nov. 2.

A default could have catastrophic results for the economy that include raising the cost of borrowing by driving up interest rates, rattling financial markets and delaying Social Security payments to the elderly.