(Bloomberg) — Senate Majority Leader Chuck Schumer plans Wednesday to seek a vote in his chamber whether to take up a measure approved by the House that would suspend the nation’s debt ceiling until December 2022. Republicans pledge to block him. 

Schumer’s attempt will mark his third try in nine days, amid a partisan stand-off over how to address the Treasury’s looming deadline for running out of cash. Without legislation, the department may default on its federal obligations. Janet Yellen, Treasury Secretary has stated that the “x-date” will fall around October 18.

The President Joe Biden, along with congressional Democrats, has asked Republicans to end blocking a vote to address the debt ceiling. Instead allow the majority party pass a bill to avert what Yellen repeatedly warned would be a devastating event for the U.S. and global financial markets.

GOP lawmakers called for Democrats to lift the debt limit by reconciliation. This is the filibuster-bypassing method Democrats used to pass a massive social-spending bill worth a staggering multi-trillion dollars, which was strongly opposed by Republicans. Democratic lawmakers claim that the process makes it too difficult to address the issue quickly enough to prevent damage to the markets and economy.

The Key Stories and New Developments

• On Wednesday, Senate members will attempt to pass a debt limit bill.
• There are many options that policymakers and lawmakers have in order to avoid default
• This QuickTake explains the debt ceiling

Eastern Daylight Time:

Debt-Ceiling’s Market Risks ‘Seem Moderate,’ JPM’s Barry Says (9:34 a.m.)

Given that the financial system is flush with cash, current debt-ceiling risks “seem moderate,” JPMorgan strategist Jay Barry said Tuesday during an event at the Brookings Institution. 

“We’re at about a five relative to a 10 in 2011 and 2013 because we haven’t seen it propagate out the yield curve,” Barry said during a panel discussion. — Alexandra Harris

The Estimate Seeks Treasury Cash Out by Nov. 4th Latest (9.12 a.m.).

Bipartisan Policy Center in Washington now predicts that Treasury Department would exhaust all extraordinary measures to avoid breaching the debt ceiling between Oct. 19, and Nov. 2. 

That compares with the Treasury Department’s estimate of around Oct. 18, and a previous BPC calculation of Oct. 15 to Nov. 4.

“Even leading up to October 19, the Treasury Department will find itself with dangerously low cash levels. An unexpected event during that time frame could escalate into a financial crisis,” Shai Akabas, BPC’s director of economic policy, said in a statement Wednesday.

White House Warns of ‘Maelstrom’ in Case of Default (7:45 a.m.)

Cecilia Rouse Chair of White House Council of Economic Advisers warns that defaults by Treasury could lead to a worldwide financial crisis or recession.

“If the United States does default, the consequences could escalate rapidly and profoundly. The timeframe of these impacts is unclear, since the United States has never defaulted,” Rouse and fellow members of the CEA wrote a blog post Wednesday. Unlike the aid deployed during the pandemic, limits placed by the debt limit mean “the federal government could only stand back, helpless to address the economic maelstrom,” they wrote.

The CEA stated that the following could be affected by disruptions to federal payments:

• 50 million Social Security retirees receive Social Security benefits
• Medicare: 60 Million
• 75 Million people are enrolled in Medicaid
• 42 millions are eligible for Supplemental Nutrition Aid Program cash
• 60 million children are eligible for child tax credits
• 30 Million children receive school lunches

Biden meets with CEOs in order to emphasize the danger of debt default (7:28 am.)

According to White House officials, President Joe Biden will be meeting Wednesday with corporate and financial leaders to discuss the possible damage that a default on debt could cause to the U.S. Economy. This is in spite of the fact that lawmakers are continuing to brinkmanship regarding the debt limit.

Multiple chief executive officers will attend, which is expected Citigroup Inc (NYSE:).’s Jane Fraser, Bank of America Corp (NYSE:).’s Brian Moynihan and JPMorgan Chase & Co (NYSE:).’s Jamie Dimon.

Dimon will participate virtual. He’s not planning to weigh in on the specific legislative vehicle that should be used to address the debt limit, according to a person familiar with the matter. — Jennifer Epstein, Hannah Levitt

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