Congress has until Oct. 18 to raise the debt ceiling, according to Treasury Secretary Janet Yellen. If it is not raised, the U.S. will default on its debt for the first time in the country’s history. Democrats appear poised to accept an offer from Senate Minority Leader Mitch McConnell (R-KY) on a measure to increase the debt limit enough to delay the deadline to sometime in December. The deal would put off the potential for debt default until later in the year. After that, Republicans would again insist that Democrats act alone to raise the debt ceiling through the budget reconciliation process—unless they agree to drop their $3.5 trillion social tax and spending bill, in which case the parties could work together, McConnell said.

Meanwhile, the White House is still trying to broker a deal to cut back on President Biden’s ambitious economic agenda, weighing liberal policy priorities against centrist concerns about inflation and tax increases. Biden continues to rally support to enact two packages - a roads-and-bridges focused infrastructure plan and a trimmed-back social-spending bill. He told Congressional Democrats that the $3.5 trillion social spending package will likely need to be trimmed to $2.3 trillion or less, creating division within the Democratic Party. Read more here.