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Senate leaders aim to finalize a deal to avoid the immediate threat of default

RACHEL MARTIN, HOST:

Congress is edging closer to a solution on the debt limit, but solution is honestly probably generous because they're just buying time to avoid defaulting on America's debts.

NPR Congressional correspondent Kelsey Snell has been following all this and joins us now. Good morning, Kelsey.

KELSEY SNELL, BYLINE: Good morning.

MARTIN: All right, so explain what is happening at this point. There's a temporary fix on the table?

SNELL: Yeah. Republicans decided sometime yesterday to offer the idea that they would agree to get out of the way and let Democrats approve a short-term extension of the debt limit. It would be to a fixed dollar amount that they say would carry them into sometime in December, which would have a kind of lining up with when we see the government funding deadline already set for the very beginning of December, when you see these deadlines kind of remerge together. Democrats said that they were open to the idea of doing something short term. But Republicans had some terms.

They said that they wanted the agreement to be that they would do this in exchange for Democrats moving forward with doing a longer-term fix to the debt limit using budget reconciliation, which is this tool of the budget process that helps them avoid a filibuster. Now, this brings them down a familiar path, where they are again fighting about the process for dealing with something that has huge economic impacts. I mean, just to put some context on this, the treasury secretary, Janet Yellen, has warned that default or downgrade could cause a recession. Now, these are really serious things that they're talking about here when they're talking about the debt limit.

MARTIN: Right. And that's why this affects Americans' everyday lives...

SNELL: Absolutely.

MARTIN: ...Because we're talking about another possible recession. But let's talk about what is on the table. You're saying that Republicans will grant this temporary allowance for the debt limit to be raised. But it means reconciliation for Democrats. And Democrats haven't wanted to do that, right? Are they OK with it now?

SNELL: They are not OK with it. They are fine, again, with the short-term plan. But they say it doesn't really change their feelings about reconciliation at all. Bernie Sanders, who's the chairman of the budget committee, flat out said that they absolutely won't go along with doing reconciliation. They say that they've got a couple of reasons for that. One is that they don't want to set the precedent that the only way to address the debt limit is by using this tool of the budget process that is only available to them once every fiscal year. They say it's a bad way to get things going. And they say that they also don't want to be forced into this position by Republicans, you know, to go down a procedural path when they are not comfortable with it. So they are trying to figure out a way to get a deal to prevent the threat of default but also not lock themselves into a process they don't agree with.

MARTIN: Well, then what is this temporary solution going to achieve? I mean, what's the point of trying to punt this down the road for two months?

SNELL: Well, it would avoid the immediate threat of default. You know, Congress loves to kind of put these deadlines together. As I mentioned, it would line the debt limit back up with government funding. They would have to be preventing a shutdown again. They also love to put deadlines right around the holidays because they can use it as kind of a battering ram against one another and kind of force people to start caving so that they can go home to their families. But Democrats say it would also give them more time to weaken Republican defenses. And it gives them time to use reconciliation to pass the rest of Biden's agenda. Now, Republicans think it would work in the opposite way and they would be able to drive home the point to Americans that, you know, Democrats are responsible for the debt and should have to handle it all on their own.

MARTIN: So this is still even just a proposal, though. Do we know if it's going to work, even this temporary fix?

SNELL: They were negotiating all last night. And the goal right now is to get agreement sometime today if they can so they can move forward as quickly as possible.

MARTIN: All right, NPR congressional correspondent Kelsey Snell - we appreciate your reporting, Kels. Thanks.

SNELL: Thanks for having me. Transcript provided by NPR, Copyright NPR.