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House approves extension of debt ceiling until early December

Now that the Democratic-controlled House has passed the short-term extension, it is cleared for President Joe Biden’s signature.

Treasury Secretary Janet Yellen had warned lawmakers the federal government would likely be cash-strapped by October 18 unless Congress raises the debt ceiling, setting up a countdown and high stakes.

Congress may not even have had that long to act, as the deadline is more of a rough estimate than a deadline set in stone. This momentum has intensified the pressure on Democrats and Republicans to reach a debt ceiling deal.

But the temporary extension of the debt limit is only a short-term solution and sets up another potential budget crisis looming later this year when it runs out.

How an agreement was reached

After weeks of partisan deadlock on the issue, Senate Majority Leader Chuck Schumer announced last week that a debt limit deal had been reached, paving the way for the Senate to vote in favor. of the agreement. An aide familiar with the negotiations told CNN that the deal raises the cap to $ 480 billion, which is what the Treasury Department told Congress it is expected to arrive on Dec. 3.

The deal’s announcement came a day after Senate Minority Leader Mitch McConnell publicly launched a debt ceiling proposal for Democrats, a move that sparked negotiations between the two sides to achieve a deal.

House Majority Leader Steny Hoyer released a statement following the Senate’s passage of the interim bill, saying the House would meet on Tuesday to pass and pass the measure.

The House did not take a stand-alone vote to approve the extension of the debt ceiling. Instead, the extension was passed when the House voted on Tuesday night to approve a rule governing floor debate on three separate measures. The complex procedural maneuver meant lawmakers uncomfortable taking a tough vote to raise the debt limit didn’t have to vote directly for it.

Why a crisis always threatens

The problem is that the dispute between the two sides over how to resolve the issue has not been resolved, and action will be needed in just a few weeks to avert the crisis again.

Republicans have insisted Democrats must act on their own to tackle the debt limit through a process known as budget reconciliation. Democrats have argued that the issue is a bipartisan responsibility. They have so far largely ruled out the possibility of using reconciliation, arguing that the process is too long and cumbersome and that the risk of miscalculation is too high.

McConnell sent Biden a letter late last week with a warning. “I am writing to let you know that I will no longer provide such assistance if your all-Democratic government sinks into another preventable crisis,” he wrote.

“I will not participate in any future effort to mitigate the consequences of Democratic mismanagement. Your lieutenants on Capitol Hill now have the time they claimed they lacked to tackle the debt ceiling through a stand-alone reconciliation,” and all the tools to do it. They can’t invent another crisis and ask for my help, “McConnell wrote.

Raising the stakes further, lawmakers will also have to deal with public funding expiring within the same time frame as the debt limit after separately enacting a short-term extension to avoid a shutdown that only lasts until the 3rd. December.

This story and title was updated with additional developments on Tuesday.

CNN’s Annie Grayer and Matt Egan contributed.