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U.S. Democrats set showdown with Republicans on federal debt limit

FILE PHOTO: A U.S. flag flies outside of the Capitol dome in Washington WASHINGTON (Reuters) -The top Democrats in the U.S. Congress on Monday said they would aim to continue funding the government and increase its borrowing authority in a single bill in coming days, setting up a showdown with Republicans who have vowed not to approve more debt.

House of Representatives Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer said the bill, which must pass by Oct. 1 to avoid the third partial government shutdown in the past decade, would also suspend the nation’s borrowing limit until after the 2022 elections that will determine which party controls Congress.

But with Senate Republicans vowing to oppose any increase in federal borrowing authority, the two parties are engaging in a dangerous game that could cause widespread government disruptions or at the very least rattle financial markets until a deal is reached.

Democratic Senator Patrick Leahy, who chairs the Senate Appropriations Committee with oversight of government spending, told reporters that with 60 votes needed in that chamber to advance legislation and with Republicans in opposition, there likely are not the votes to pass the combined measures.

"I’m not sure what’s going to happen," Leahy said.

He added that negotiations over the past weekend ended inconclusively.

Democrats so far have rebuffed Senate Republican Leader Mitch McConnell’s suggestion that the debt limit be passed through a budget reconciliation bill that Democrats would pass without any Republican support under a special procedure.

Democrats insist that the debt limit increase should remain a bipartisan effort.

"Anyone who says this is Democrats’ debt is not talking fact, they’re talking fiction. Both sides have a responsibility to pay for the debt we’ve already incurred," Schumer told the Senate.

Senate Republican Leader Mitch McConnell reiterated his opposition to raising the debt limit after Schumer’s words.

"Since Democrats decided to go it alone they will not get Republicans’ help in raising the debt limit," McConnell said. He was referring to President Joe Biden’s $3.5 trillion domestic investment program that Democrats aim to pass over Republican objections through reconciliation.

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