US debt drama nears end as Senate tackles default threat

US senators raced Thursday to pass a bipartisan debt limit deal approved overwhelmingly by the House of Representatives, with the worst-case scenario of an economy-cratering default seemingly avoided.

The Treasury has warned it could run out of money to pay its bills by Monday -- leaving almost no room for delays in enacting the Fiscal Responsibility Act, which suspends the debt limit through 2024 while trimming federal spending.

The bill passed the House on Wednesday with a big majority of 314 votes to 117 -- putting it on a glide path to the White House for President Joe Biden's signature.

"The Senate will stay in session until we send the bill avoiding default to President Biden's desk," Democratic Majority Leader Chuck Schumer said on the floor of the upper chamber of Congress.

"We will keep working until the job is done. Time is a luxury the Senate does not have if we want to prevent default."

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But a time-consuming debate with around a dozen amendments being sought by senators from both parties threatened to hold up the process, dragging it deep into the weekend.

The Senate has to agree unanimously to fast-track legislation and any individual member can draw out consideration of a bill for days.

Multiple senators have indicated that they would like to offer tweaks to the debt deal although most have indicated that they don't intend to delay the process provided voting is allowed for their proposed amendments.

Defense hawks upset at Pentagon spending being capped at Biden's budget request of $886 billion have demanded a commitment to a separate bill later in the year that would aid Ukraine's defense against the invasion by Vladimir Putin's Russia.

"You cannot say with a straight face that this military budget is a counter to Chinese aggression, that it adequately allows us to defeat Putin," South Carolina Repubican Lindsey Graham said on the Senate floor.

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"You cannot say with a straight face that this budget represents the threats America faces."

'McCarthy got played'

Meanwhile Utah's Mike Lee tweeted that the Senate could still halt the deal in its tracks.

"Long shot? Sure. But it's possible if Republicans continue to realize -- as many now are -- that McCarthy got played by (Biden)," he said.

Schumer, his Republican counterpart Mitch McConnell and their emmissaries spent much of Thursday trying to agree on timing for votes and ground rules for how the process will play out.

"I can tell you what I hope happens is that those who have amendments, if given votes, will yield back time so that we can finish this Thursday or Friday and soothe the country and soothe the markets," McConnell told reporters on Wednesday.

Schumer said any successful amendment would mean sending the entire bill back to the House which would "risk default, plain and simple."

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He didn't rule out allowing some debate on amendments but would likely insist on a 60-vote threshold for adoption of the most popular, almost guaranteeing failure.

McCarthy touted the House vote as a big conservative victory, although he fell one short of the 150 votes -- two thirds of his caucus -- he had promised to deliver as he looked to quell a right-wing rebellion to avoid an immediate threat to his job.

On the other end of Pennsylvania Avenue, the vote was being touted as a major victory for Biden, who managed to protect almost all of his domestic priorities from deep cuts threatened by Republicans.

Source: AFP