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Congress hatches novel plan to lift debt ceiling with only Democratic votes

The approach includes a multi-step process that would resolve the debt limit standoff and avoid automatic cuts to Medicare.

WASHINGTON — Congressional leaders are hatching a complicated plan to lift the debt limit this month with only Democratic votes in the Senate, three sources told NBC News.

The strategy, which remains fluid, is a product of negotiations between Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky., that would tie it to a non-controversial Medicare bill.

"I believe we've reached a solution to the debt ceiling issue that's consistent with Republican views," McConnell told reporters on Tuesday.

Schumer said Democrats support this approach as it would not be a "convoluted, risky, lengthy process," and he said it "looks like Republicans will help us facilitate that."

The novel approach would tie debt limit provisions to legislation preventing automatic cuts to Medicare in a multi-vote process that would allow the federal government's borrowing authority to be lifted with a simple majority in the 50-50 Senate.

The plan shifted on Tuesday after negotiators decided against an earlier idea of tying a debt limit increase to the $778 billion defense authorization bill. Instead, Congress plans to pass that separately.

The House passed the Medicare bill, which includes the expedited debt limit process, 222-212. Rep. Adam Kinzinger, R-Ill., was the only Republican to break ranks and vote with all Democrats for the bill.

The measure, which would require 60 votes to clear the Senate, would give that chamber one-time authority through mid-January to lift the debt limit with a simple majority vote and would delay automatic Medicare cuts. If passed by Congress and signed into law, it would enable the debt ceiling to be lifted quickly with no filibuster in the Senate — only Democratic votes.

It's not a done deal yet as it needs at least 10 Senate Republican votes to move forward.

The plan — an attempt to prevent an 11th-hour scramble to avoid what would be the nation's first ever default — would allow Republicans to stay on the sidelines of a debt ceiling hike vote, and let Democrats steer clear of the arcane budget reconciliation process that they've insisted they won't use for raising the debt limit.

"I leave it to Leader McConnell to find the best way to get the Democrats to raise the debt limit without us participating in that," said Sen. Mitt Romney, R-Utah, predicting the GOP leader would "find a way to make that happen."

The scheme would require Congress to raise the debt limit by a specific dollar amount, rather than extend it to a certain date, two sources familiar with the plan said. Democrats would prefer to set an expiration date for the new extension, as Congress has done for years, instead of choosing a new debt limit figure. But Republicans want them to put a number on it so they can weaponize the issue in 2022 midterm election campaign ads.

Still, some Republicans are worried that the approach could set a precedent of one-time rule changes at a time when many Democrats are pushing for changes to the filibuster on issues such as voting rights legislation.

"It’s a terrible idea. Terrible. It would circumvent the filibuster. This is nuking the filibuster," said Sen. Mike Lee, R-Utah.

Time is running short. Treasury Secretary Janet Yellen has warned that the U.S. risks breaching the debt limit and triggering a recession if Congress doesn't act by Dec. 15.

The new approach to resolving the debt limit comes after an acrimonious battle in October that left both Schumer and McConnell bruised. This time, both leaders have sounded optimistic about lifting the debt ceiling.

McConnell said Monday evening at a Wall Street Journal CEO Council Summit that he doesn't expect the U.S. to default.

Schumer, meanwhile, has described their talks as positive.

"We will also work to address the debt limit and preserve the full faith and credit of the United States," he said Monday afternoon on the Senate floor. "And I want to thank Leader McConnell for his cooperation in that regard."

In October, 11 Senate Republicans voted to break a filibuster to temporarily lift the debt ceiling after an extended standoff, a process that led to McConnell absorbing criticism from the right wing of the GOP. Democrats then extended the limit on their own. Among those criticizing McConnell was former President Donald Trump, who urged the party to use the debt ceiling as leverage against Democrats. In 2019, Trump insisted the debt limit must not be used as a bargaining chip.

Sen. Rick Scott, R-Fla., said he continues to oppose raising the debt ceiling but would look at the overall proposal before making a judgment.

And Democrats warned that it's not a done deal.

"There's no agreement yet," said Sen. Debbie Stabenow, D-Mich.