WASHINGTON (AP) — Senate Democrats are drafting legislation to raise the nation's debt limit without the type of unrelated conditions that Republicans have said they intend to demand, officials said Monday, as the White House signaled it would accept even a brief extension in borrowing authority to prevent an unprecedented default.
The details of the emerging measure were unclear, and it was not known when it would be unveiled.
Republicans have said they will seek long-term deficit cuts or reforms to benefit programs and perhaps a wholesale rollback in environmental rules as the price for raising the current $16.7 trillion debt limit. President Barack Obama has ruled out negotiations on the measure, although he has said he is willing to discuss fiscal and other issues with the GOP once the weeklong partial government shutdown is over and the Treasury is free to borrow again.
Gene Sperling, a senior Obama economic adviser, was pressed on whether he would rule out a two- or three-week extension on increasing the nation's $16.7 trillion debt limit. Treasury Secretary Jack Lew has warned that on Oct. 17, he exhausts the bookkeeping maneuvers he has been using to keep borrowing.
"There's no question that the longer the debt limit is extended, the greater economic certainty there will be in our economy which would be better for jobs, growth and investment," Sperling told a breakfast sponsored by the newspaper Politico. "That said, it is the responsibility of Congress to decide how long and how often they want to vote on doing that."
Economists say a default could trigger a financial crisis and recession that would echo 2008 — or worse. The 2008 financial crisis plunged the country into the worst recession since the Great Depression of the 1930s.
Sperling reiterated Obama's vow not to negotiate on the debt because it would sanction the threat of default as a bargaining chip and increase the chance of default in the future.