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The Race Is On to Avoid a Debt Ceiling Crisis

Yuval Rosenberg

Eager to avert a debt ceiling crisis, the White House is pushing lawmakers to agree to a budget deal and raise the nation’s borrowing limit within a few weeks — and is signaling a willingness to raise spending for the next fiscal year to get it done, The Washington Post reports.

The increased urgency follows warnings that the Treasury Department may have less wiggle room than previously forecast as it juggles funds and uses accounting maneuvers to avoid a default. The Treasury technically hit the debt limit in March but has been employing those “extraordinary measures” since then

The Bipartisan Policy Center said this week that, while the government likely has until October before it can no longer pay all its bills, the deadline could come as soon as early September. That report echoed warnings from Treasury Secretary Steven Mnuchin, who is the Trump administration’s point person for negotiations.

House Speaker Nancy Pelosi has insisted that any debt limit increase should be paired with a broader, two-year budget deal to avoid a possible government shutdown and raise caps that would otherwise require steep spending cuts. Senate Republicans have also favored that approach, which would let them avoid having to take a painful separate vote to raise the borrowing limit. The White House, meanwhile, had floated the idea of a one-year stopgap extension of current spending levels, but lawmakers panned that idea.

Now the Post’s Damian Paletta and Erica Werner report that administration officials have indicated they may be open to increasing spending for next year in order to facilitate a deal. “It’s about whether the administration will come up with some reasonable numbers that are compromises,” House Majority Leader Steny Hoyer told reporters, according to Bloomberg.

Mnuchin reportedly met this week with GOP leaders and spoke by phone with Pelosi. He was set to speak with Pelosi again Thursday afternoon. But it’s not at all clear whether the parties can reach a deal before lawmakers are scheduled to depart for their August recess, which has them out of session until September 9. Unless their recess plans change, they have just 10 legislative days left to get a deal done.

Pelosi on Thursday told reporters that she doesn’t want there to be “any doubt about the full faith and credit of the United States of America.” But she was less definitive about passing a debt ceiling hike before August. “We’ll just see about our timing,” she said.

Further complicating matters, Politico suggests, are the Trump administration’s controversial plans to launch mass immigration enforcement raids starting on Sunday. Will Democrats be in any mood to negotiate if the administration follows through on those raids?

 

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