Debt ceiling: Biden meets CEOs with Schumer, McConnell at impasse: LIVE UPDATES

Fox News congressional correspondent Chad Pergram is told that both Senate Democrats and Republicans are trading paper on a potential agreement on the debt ceiling.

"The Senate has NOT finished for the night." Pergram reported.

Thee Senate is in recess subject to the call of the chair and may come back later tonight. The longer this drags out, the less likely a vote will be. 

Fox is told the vote could come tomorrow at some point. The House has been out of session all week. It is unclear when the House could come back to session to align with the Senate. That may not happen until next week.

Senate Democrats indicated Wednesday that they planned to accept Senate Minority Leader Mitch McConnell’s offer for a short-term suspension of the debt ceiling, with some claiming the Kentucky Republican had "caved" following a tense standoff on Capitol Hill.

Democrats spoke out after a closed-door meeting in which they discussed McConnell’s offer to raise the debt ceiling by a "fixed dollar amount" through December. Republicans had blocked efforts to suspend the borrowing limit for weeks, arguing Democrats should address the crisis through the budget reconciliation process.

"McConnell caved," Sen. Elizabeth Warren, D-Mass. told reporters after the meeting. "And now we're going to spend our time doing child care, health care, and fighting climate change."

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“Well we’re not going to do debt limit through reconciliation and at this point, if we have, you know, if there's, depending on the language of what, we haven't seen anything in writing," Democratic Sen. Debbie Stabenow told reporters. "So, but we're definitely not using reconciliation for this. At this point, if we can move it till December, that just gives us more time to get bill back better done and get the President's agenda done."

Stabenow added, "There is no proposal in writing in this point, but if it is an extension to December, we will use that time to complete the President's agenda for people."

Sen. Elizabeth Warren told reporters "McConnell caved" after leaving a meeting with Senate Democrats hinting that they will agree to a short-term debt limit increase. 

Sen. Bernie Sanders told reporters: “They [Republicans] have finally done the right thing. At least we now have a couple of months to get a permanent solution.”

Sen. Chris Murphy added, "We'll be back in the same position. That's why this offer is so, so nonsensical but, again, there's only one party here that interested in governing. It's the Democratic Party. And so we are willing to take this offer in order to stave off fiscal ruin, but 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."

The immediate reaction from Democrats was highly mixed following a new offer from Senate Minority Leader Mitch McConnell, R-Ky., to either expedite the passage of a debt ceiling bill under reconciliation or to pass a temporary debt ceiling increase.

Senate Majority Whip Dick Durbin, D-Ill., seemed to indicate Democrats will consider the offer when asked about it Wednesday.

"We’re gonna discuss it," he said.

But pressed by Fox News if that means he is open to raising debt limit via reconciliation -- which would eventually be included in either part of the McConnell offer -- Durbin demurred.

“I think that’s a bad idea,” he said, though he did not elaborate.

But Sen. Maize Hirono, D-Hawaii, had a much stronger reaction to the offer.

"What kind of offer is that?" she said, according to Fox News' Kelly Phares. "It's bulls***, that's what it is."

Sen. Chris Coons, D-Del., a close ally of the president, said he would "consider it" though it "depends on the terms," Fox News' Kelly Phares reported.

And Sen. Chris Murphy, D-Conn., said he was confused about McConnell's offer, according to Fox News' Kelly Phares.

"I don't get it. I don't get it. He can give us the ability to pass it with 50 votes right now why is he creating these Rube Goldberg like schemes," Murphy said.

The Senate is delaying a planned vote on the debt ceiling increase as Democrats meet for a caucus lunch that was planned earlier in the day, according to Fox News' Chad Pergram. It's likely they could have a more unified message on McConnell's offer when they finish their meeting.

There are just 12 days until the U.S. defaults on its debt if Congress does not take action. The economic consequences of such a default would be severe.

Senate Minority Leader Mitch McConnell, R-Ky., say Republicans' latest offer on the debt ceiling will "moot" Democrats' complaints about reconciliation being too unwieldy a tool to raise the limit with so close to a default.

McConnell says Republicans will be happy to either expedite a debt ceiling increase via reconciliation or pass a short term increase that will carry Congress until the end of November.

"Republicans remain the only party with a plan to prevent default. We have already made it clear we would assist in expediting the 304 reconciliation process for stand-along debt limit legislation," McConnell said in a Wednesday statement. "To protect the American people from a near-term Democrat-created crisis, we will also allow Democrats to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover spending levels into December."

McConnell also hinted that if Democrats drop their reconciliation bill, Republicans it "could be possible" for Republicans to help raise the debt limit through standard procedures.

Senate Minority Leader Mitch McConnell, R-Ky., is going to offer Majority Leader Chuck Schumer, D-N.Y., a potential off-ramp in the Senate's debt ceiling standoff on Wednesday, Fox News' Chad Pergram and Jacqui Heinrich report.

The potential offers from McConnell include a short-term suspension of the debt ceiling that would allow Democrats more time to raise the debt ceiling through the budget reconciliation process.

Or, alternatively, Republicans might agree to take it easy on Democrats during a reconciliation process this month. That would mean not forcing vote-a-ramas that last all night, for example.

The development signals that while Republicans have made clear they are serious about forcing Democrats to raise the debt limit through reconciliation -- which both of the above options would inevitably include -- they are also serious about avoiding a debt default.

It remains to be seen how Senate Democrats will react to this offer. Senate Majority Leader Chuck Schumer, D-N.Y., has been clear that he is not interested in increasing the debt limit via reconciliation.

Sen. Lindsey Graham, R-S.C., said Wednesday that Republicans would likely allow Democrats to quickly move a bill to increase the debt limit via budget reconciliation because the GOP is trying to make a point on government spending, not cause the government to default.

Asked whether the GOP might allow reconciliation to go smoothly for Democrats -- rather than force all-night vote-a-ramas and a dragged out process -- Graham said that is a strong possibility according to Fox News' Jason Donner.

"The point is that we're not trying, or at least I'm not trying to burn the place down," Graham said. "If you want to spend this much money, which is an historic amount of monty, not just on roads and bridges and ports, then you're not going to get any help from me to raise the deficit."

Graham added: "You can't have it both ways. You can't deal us out when it comes to spending and ask us to help you have a blank check for future spending."

Republicans are expected to all vote against a procedural motion to advance a debt ceiling increase later Wednesday.

Senate Majority Leader Chuck Schumer, D-N.Y., Wednesday assailed Republicans for "reckless" and "irresponsible" efforts to force Democrats to raise the debt ceiling via budget reconciliation.

And with a vote on a cloture vote on a bill to raise the debt ceiling scheduled for Wednesday afternoon, Schumer implored GOP senators to "do our jobs" and increase the debt ceiling.

"In America, we have always kept a basic promise: we pay our debts on time, without exception. It’s long been a key to our economic success and our standing in the global markets across the world," Schumer said. "Today, it’s time for us in this chamber to do our jobs and make sure those promises remain unbroken."

But all Senate Republicans have indicated that they will refuse to vote for any legislation that raises the debt ceiling. They want Democrats instead to use the budget reconciliation process as retaliation for all of the party-line spending Democrats are passing via reconciliation.

Schumer has said Democrats will refuse to do that, however, which leaves no clear path to increasing the debt ceiling. Schumer did mention one possibility in his floor speech Wednesday that the debt ceiling bill could pass this week without GOP votes: If Republicans allow the Senate to invoke cloture on the bill via unanimous consent.

"Republicans can simply get our of the way, we can agree to skip the filibuster vote so we can proceed to final passage of this bill," Schumer said. On final passage, Democrats could pass the bill along party lines with a 50-50 vote, and Vice President Harris breaking the tie.

But it's expected that at least one GOP member will force a vote, on which all GOP senators will likely vote in the negative.

The White House is warning that a failure to raise the debt limit would threaten U.S. national security and have broad "implications" for military families, Fox News' Brooke Singman exclusively reports.

Fox News obtained a White House memo Wednesday laying out the "consequences of default" on national security and for military families.

"At a time when liberal democracies are being challenged to deliver for their people, by autocracies abroad, now is not the time to undermine the credibility of the U.S.’s ability to govern," the White House memo said. "If the U.S. defaults on its obligations, the ripple effects will have implications for our national security and military families."

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Senate Minority Leader Mitch McConnell, R-Ky., said on the Senate floor Wednesday that Republicans might be willing to take it easy on Democrats if they raise the debt ceiling using budget reconciliation.

"This year, Democrats requested and won new powers to repeatedly reuse the reconciliation process. In the last few days, Democrats in both the House and Senate have publicly admitted their party could handle the debt limit that way," McConnell said.

"Our colleagues have plenty of time to get it done before the earliest projected deadline," he added. "There would be potential for time agreements to wrap it up well before any danger."

This would mean, perhaps, that Republicans would not force all-night vote-a-ramas and that they could help speed things along procedurally, even if they do not take any votes in favor of raising the debt limit.

McConnell's comments came just minutes before Sen. Joe Manchin, D-W.Va., took an idea other Democrats had of partially nuking the filibuster to pass a debt ceiling increase off the table.

This basically leaves budget reconciliation -- the option Republicans want Democrats to use -- as the only remaining option for Democrats to raise the debt limit on their own.

But Senate Majority Leader Chuck Schumer, D-N.Y., has said he has no interest in doing so.

Sen. Joe Manchin, D-W.Va., took partially nuking the filibuster off the table as an option for Democrats to raise the debt ceiling in Wednesday morning comments, Fox News Jason Donner reports.

"We are not going to default as a country. We wil not default. That's the responsibility we have as Senators, as Congress, as 535 of us responsible to protect this great country," Manchin said. "I truly implore both leaders, my caucus -- my majority leader, Chuck Schumer. And basically the minority leader is Mitch McConnell."

Manchin continued: "I implore them, they engage, start working, work this out. This should not be a crisis."

Manchin addressed some of the chatter about raising the debt ceiling by partially nuking the filibuster.

"I've been very, very clear where I stand, where I stand on the filibuster," he said. "Nothing's changing. But the bottom line is we have a responsibility to be the adults. Our leadership has a responsibility to lead. And that's what I'm asking, imploring them to do. We should not have these artificial crises."

The Senate today tees up the latest confrontation over the debt ceiling. Somewhere in the 3 p.m., hour, we expect the Senate to begin and conclude a procedural vote on an effort to break a filibuster on a bill to suspend the debt ceiling until December, 2022.

Such a vote needs 60 yeas to wrap up debate and move on to final passage. However, Republicans are filibustering any hike or suspension of the debt ceiling. The GOP will not provide the additional ten votes required to hit the 60 vote threshold – if all 50 Democrats vote yes to end debate.

 So, any movement on the debt ceiling is stuck as the clock ticks closer to the October 18th witching hour for a potential federal default.

Except… After that failed vote, Democrats would then have in their arsenal one potential tool to lift the debt ceiling without GOP assistance. A failed cloture vote is the procedural tool Democrats need to possibly (and I’ll underscore possibly) launch a “Nuclear Option” to bypass a filibuster the pass the bill with a simple majority. 

The Senate features unlimited debate. But one of the few things which are not is a “reconsideration” of the failed vote. In other words, voting again on the same thing which failed. This is where Democrats could possibly create a special carve-out for debt ceiling-related bills.

A possible carve out would make measures dealing with suspending or lifting the debt ceiling exempt from filibusters. Democrats could then lift the debt ceiling on their own. However, Democrats need at least 51 votes to establish this new precedent for debt ceiling related bills.

It is not clear that Democrats would have the votes to do so. All 50 would have to stick together and have Vice President Harris break the tie. 

This would follow the new precedents established with Nuclear Option I in 2013 to reduce the threshold to break a filibuster for executive branch nominees and Nuclear Option II in 2017 to slash the floor to end a filibuster on Supreme Court justices. The Senate would be in the same parliamentary position after today’s failed procedural vote as the Senate was in 2013 and 2017 – leading to both nuclear options. 

Also, note that a nuclear option is NOT a change in the Senate rules. It is a change in Senate PRECEDENT. The Senate conducts much of its work via precedent compared to the standing rules. And, it is easier to establish a new precedent in the Senate for the filibuster (via the Nuclear Option) compared to changing the Senate rules. 

But there is a bigger issue afoot here: Nuclear Options I and II opened Pandora’s Box to forever altering the Senate and chipping away at the filibuster. But a move against the filibuster on the debt ceiling is unique compared to the previous nuclear options. 

If the Senate were to create a special carve-out for the debt ceiling, that is the first foray they would have altered the filibuster provisions for LEGISLATION. Previous filibuster changes dealt exclusively with NOMINATIONS. 

Thus, the slippery slope begins. 

Where would the end of the filibuster changes stop? Special carve-outs for immigration reform? DC statehood? Guns? Voting rights? Democrats conceivably do that on ANY bill – so long as they have at least 51 votes. And to be clear, having the votes to engineer a nuclear option is the hard part. 

But here’s the rub. Capitol Hill and every school playground in America have one thing in common: paybacks are hell.

If Democrats deploy a nuclear option on the debt ceiling or anything else and LOSE the Senate in the 2022 midterms, you can be sure that Republicans would bypass Democrats and undo vast swaths of their agenda implemented.

Democrats, then in the minority, would be unable to stop them because they can’t filibuster. Republicans could then approve virtually any piece of legislation and unwind many of the Democrats’ policies with a simple, majority vote.

The building battle over how to raise the debt ceiling will come to a head Wednesday afternoon when Republicans are expected to filibuster a procedural vote to raise the debt ceiling.

The vote, scheduled to happen after 2 p.m., will require 60 yeas. But Republicans have been very clear that they intend to vote against it uniformly.

As punishment for spending trillions of dollars without GOP input via budget reconciliation, Republicans want Democrats to use the same process to raise the debt ceiling. Minority Leader Mitch McConnell, R-Ky., says the GOP has no demands and does not intend to compromise – they are locked into their protest. 

\And even the most moderate GOP members like Sen. Mitt Romney, R-Utah, are on board with the strategy.

"There is already an existing carveout where Democrats can do it themselves—it’s called reconciliation," Romney tweeted Tuesday in response to a commentator suggesting Democrats change the filibuster to raise the debt ceiling.

So Democrats' plan will fail. And with 12 days until the U.S. will default on its debt, according to Treasury Secretary Janet Yellen, they do not have another one.

Some Democrats have indicated they may be open to raising the debt ceiling via reconcilaition if they absolutely have to. But Majority Leader Chuck Schumer, D-N.Y., has said that is not on the table.

Others have batted around the idea of partially nuking the filibuster in order to raise the debt ceiling. But Sen. Joe Manchin, D-W.Va., dismissed that idea on Monday, according to Fox News' Jason Donner. Nuking the filibuster for the debt ceiling could create a slippery slope of it being eliminated for other issues too.

"We have other tools we can use," Manchin said. "And if we have to use them, we should."

And yet more Democrats have said that the Treasury should print a $1 trillion coin, or that President Biden should claim the power to unilaterally raise the debt ceiling. But those have been dismissed by experts as likely to cause the kind of panic and uncertainty in the economy that an orderly lifting of the debt ceiling is meant to avoid.

All with 12 days until the U.S. will default on its debt.

Republicans, meanwhile, have said over and over and over that they will not cave and help Democrats raise the debt ceiling.

"The majority doesn’t need our votes. They just want a bipartisan shortcut around procedural hurdles they can clear on their own," McConnell said on the Senate floor this week. "And they want that shortcut so they can pivot right back to partisan spending as fast as possible. They want a bipartisan shortcut to get right back to more partisan hardball! And Republicans have spent two and a half months explaining they will not get it."

He added: "The majority needs to stop sleepwalking toward yet another preventable crisis. Democrats need to tackle the debt limit. We gave them a road map and three months’ notice. I suggest that our colleagues get moving.”

The fact is, either party could guarantee that the debt limit gets increased if it decides to do so.

Republicans could vote for a procedural "cloture" vote then allow Democrats to pass the final debt limit increase on party lines.

Or Democrats could use the same reconciliation process they have been more than happy to use on their massive spending bills this year.

But so far neither side appears to be budging.

With just 12 days until the U.S. defaults on its debt.

Congress is barreling toward a mid-October deadline to raise or suspend the debt ceiling, but Democrats and Republicans on Capitol Hill are locked in a fierce stalemate with no clear plan to avert what would be the first-ever default in the U.S.

There are no signs the partisan showdown is coming to an end: Senate Majority Leader Chuck Schumer is planning a vote as soon as Wednesday on a measure passed by the House to suspend the legal debt limit until December 2022, Fox News' Megan Henney reports.

But Senate Minority Leader Mitch McConnell has pledged to block the effort – marking the third time Republicans will do such a thing. 

...

The economic implications of a debt default would likely be severe, experts say: Interest rates would likely spike, and demand for Treasurys would drop; even the threat of default can cause borrowing costs to increase. Once the U.S. runs out of money, Treasury would be unable to meet about 40% of all payments due in the several weeks that follow, according to one analysis conducted by the Bipartisan Policy Center.

"New data demonstrate that Congress has only weeks to address the debt limit," Shai Akabas, director of economic policy at the Bipartisan Policy Center, said in a statement. "If they don’t, the U.S. government risks missing or delaying critical bills that will come due in mid-October that millions of Americans rely on, from military paychecks and retirement benefits to advanced child tax credit payments."

The U.S. has never defaulted on its debt before, although it came close in 2011 when House Republicans refused to pass a debt-ceiling increase, prompting rating agency Standard and Poor's to downgrade the U.S. debt rating one notch. 

One analysis by Moody's Analytics chief economist Mark Zandi shows that breaching the debt limit could plunge the U.S. into another recession: The default could eliminate as many as 6 million jobs, pushing the unemployment rate as high as 9%, and wipe out up to $15 trillion in household wealth. 

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President Joe Biden told reporters Tuesday that Democrats could use the "nuclear option" to prevent Republicans from filibustering their plan to raise the debt ceiling, according to Fox News' Andrew Mark Miller.

"Oh, I think that’s a real possibility," Biden told reporters on the White House’s South Lawn about the possibility of a "nuclear option" to prevent Republicans from filibustering the vote to raise the debt ceiling.

Biden’s comment comes as some Democrats have floated the idea. But it will likely be a heavy lift to convince all 50 Democrats to get on board with such a plan, especially Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz.

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Pro-Trump demonstrators spill out into the street as they jeer U.S. President Joe Biden in his motorcade after a visit to the International Union of Operating Engineers Local 324 training facility in Howell, Michigan, U.S., October 5, 2021. REUTERS/Jonathan Ernst

President Biden traveled to Michigan on Tuesday to promote his stalling "Build Back Better" agenda – but found an angry group of protesters waiting for him not far from the site where he delivered his speech.

Those opposing Biden in Howell numbered about 500, the Detroit Free Press reported, with many participating in profane chants against the president.

Howell is located about midway between Detroit and the state capital city of Lansing.At one point, the protesters cheered when a green front-end loader with a "No Biden" sign traveled down the road, according to the newspaper.

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President Joe Biden defended his "Build Back Better" spending plan in a Tuesday speech, insisting once again that he is a "capitalist" at heart and that his bill currently tied up in Congress is fully paid for.

"I'm a capitalist," Biden told a crowd at the International Union of Operating Engineers Local 324 training facility in Howell, Michigan. "I think you should be able to go out and make a million or a billion, but just pay your fair share."

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Sen. Joe Manchin, D-W.Va., said Tuesday he is open to a social spending bill larger than $1.5 trillion, signaling the possibility that the moderate Democrat could soften his stance on the topline number following days of tense negotiations on President Biden’s signature piece of legislation.

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