Senate passes short-term debt ceiling extension

Senate Majority Leader Chuck Schumer announced they’ve reached an agreement on an extension of the debt ceiling through early December. He said he hopes they can “get this done” as soon as today.

Some background: Senate Minority Leader Mitch McConnell floated two potential options to avert a default yesterday, including this short-term increase.

In a statement on Wednesday, McConnell said that Republicans have "already made it clear" that they would "assist in expediting" a process known as reconciliation, which would allow Democrats to raise the debt limit without GOP votes. Democrats have been generally opposed to that idea, calling it too unwieldy, time-consuming and risky.

In addition to that, McConnell said that Republicans "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."

CNN's Clare Foran contributed reporting to this post. 

Senate Majority Leader Chuck Schumer said they are making progress on crafting a short-term deal to increase the debt ceiling, but also suggested hang ups remain. 

He said negotiations continue and he's hopeful they will come to an agreement today. 

Asked about what the remaining sticking points were, Schumer pointed toward Senate Minority Leader Mitch McConnell’s office and said, “talk to the Republicans.”

A rare moment on Capitol Hill Wednesday gave way to a potential deal on the debt ceiling.

Senate Minority Leader Mitch McConnell blinked after a three-month stalemate with Democrats. Democrats appear to have taken a deal that many in the caucus acknowledge is little more than kicking the can down the road.

But as aides and members have made clear to CNN over the course of the last 15 hours, what other choice was there? Democrats were insistent they'd run out of time to use a convoluted budget process and moderate Democratic Sen. Joe Manchin of West Virginia wasn't budging on changing the rules of the Senate, even in the midst of this emergency.

What transpired Wednesday and is still being negotiated Thursday morning is the bare minimum way out of this, but it's a way out. That more than anything explains the motivations here.

Bottom line: The potential for a fiscal calamity was real and getting more dire every day this stalemate continued. That was becoming painfully clear to lawmakers on both sides of the aisle. The fear of a downgrade to the US credit rating was a real and present danger. But make no mistake that even if a deal is reached Thursday (and aides say it's moving in the right direction), an agreement delays, but does not resolve, this showdown.

Democrats still say they won't use reconciliation (even though they would now have the time to do so) and Republicans say they won't help pass a longer-term debt ceiling increase.

In other words, déjà vu is coming to a late November/early December near you.

Read more about debt ceiling negotiations here.

Everyone seems to agree the US debt ceiling should be raised to pay for tax cuts and spending the government has already approved — and to avoid the economic calamity that would likely result from a US default. But Congress is tied up in knots.

There are a growing number of creative solutions being thrown around as the parties stick to their guns and tempt economic calamity. Here's a look at the options from completely insane to very likely:

Bipartisan agreement. Ha! I'm listing this as the most fanciful, most unbelievable, least likely way to pay the nation's debts because that's the partisan space we're in at the moment. Bipartisan agreement is the way Capitol Hill should work. But Capitol Hill doesn't work right now. Republicans could simply allow an up or down vote by Democrats. A few Republicans could even join in. That seems very unlikely since, despite the stakes for the economy, the party has decided to focus on this moment to make its political point. It's a little more complicated than that, and Democrats could certainly try to push a simple proposal to raise the debt limit. But everyone is very dug into their positions.

$1 trillion coin. It's a little bit of simple elegance and a lot of mad genius. President Joe Biden doesn't actually need Congress to mint a $1 trillion commemorative coin, the kind of thing normally minted for collectors, but in this case suggested it so the government could pay obligations and paychecks. Make the coin platinum. Put Harriet Tubman on one side since her appearance on the $20 bill has been so long delayed. The important thing is for Biden to recognize it as $1 trillion, deposit it and voila, the debt ceiling problem is solved for now. There would certainly be legal challenges. The biggest obstacle is the White House has rejected the idea. Let's see what Biden says if the US is actually about to default. Read Chris Isidore's report.

One-time suspension of the filibuster. Republicans have painted Democrats into a procedural corner. They've promised to filibuster attempts to raise the debt ceiling by requiring 60 votes to limit debate. One idea is to set aside the filibuster by changing the Senate rules for this one vote. It would allow Democrats an end run around the GOP obstruction to raise the debt ceiling on their own.

Biden, who served decades as a senator and has been loathe to get rid of the filibuster, said a one-time suspension is "a real possibility."

What makes it unlikely is there are a number of Democrats, like Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona, who oppose ending the filibuster. Where they stand on this one-time idea to save the economy is not clear. The truth of the matter is that once somebody ends the filibuster for one thing, it's going to be a short while before it's gone for everything. From that perspective, the filibuster has been on borrowed time since Democrats ended its use for executive nominations and Republicans nuked it for Supreme Court nominations.

Use the 14th Amendment. This is in the same vein as the $1 trillion coin, but without the cheekiness of a commemorative coin and with the weight of a reinterpretation of the Constitution behind it. It's an expansive view of executive power that Republicans would encourage in a Republican president, but will challenge if Biden does it.

Here's what the 14th Amendment says about debt in Section 4:

The debt we're talking about here has already been authorized by law in the form of tax cuts and spending bills, right? Previously, Congress has been called on to raise the debt ceiling with laws. So this would be a complete reinterpretation. Courts would undoubtedly be asked to weigh in. But not until Biden issues an order to suspend the debt. The closer we get to Oct. 17, the more attractive this will be.

Budget reconciliation. This is the most discussed path, so that could make it most likely. It's what Democrats don't want to do, and while they are in the majority, reconciliation is what McConnell has pushed. As long as he keeps Republicans united, that gives this path the edge.

Democrats and Republicans remain locked in a stalemate over how to address the debt limit, but Senate Minority Leader Mitch McConnell is now publicly floating two potential options to avert a default.

The move marks a shift that opens the door to a potential path forward amid the ongoing partisan impasse, but it's not yet clear if it will be enough to end the deadlock and whether a deal can be reached between the two parties.

Democratic Sen. Dick Durbin of Illinois, the majority whip, told CNN that Democrats are "waiting to see it" when asked if his party would agree to McConnell's offer.

Durbin also said it would be "unacceptable" if the deal requires that Democrats still use reconciliation later on.

Sen. Debbie Stabenow of Michigan, a member of Democratic leadership, said the proposal from McConnell is still being drafted into legislative language.

"At this point we have no language. There is an idea, there is a proposal, (but) there is no proposal in writing," she said.