Sen. Susan Collins floats GOP support for a debt limit hike in exchange for Democrats abandoning Biden's $3.5 trillion social spending plan

• Sen. Collins floated GOP support for a debt limit hike if Democrats abandoned Biden's economic agenda.

• Democrats flatly dismissed Collin's suggestion as a non-starter.

• Republicans are refusing to raise the debt limit, intensifying a standoff that's pushing the US closer to default.

• See more stories on Insider's business page.

Sen. Susan Collins of Maine suggested some Republicans would back a debt limit hike if Democrats abandoned the $3.5 trillion social spending package containing the bulk of President Joe Biden's economic agenda.

On Monday, she suggested that "some Republicans would vote to raise the debt limit if they knew the Democrats were going to abandon the $3.5 trillion package, which appears unlikely but that's an agreement that could be reached."

The Maine Republican echoed Senate Minority Leader Mitch McConnell and urged Democrats to raise it unilaterally through reconciliation. It's the same maneuver the party is using to approve their hefty social spending plan relying on only Democratic votes and bypassing unanimous GOP opposition.

Democrats aim to expand Medicare and Medicaid, ensure families can access and afford childcare, add four years to public education with universal Pre-K and tuition-free community college, and renew monthly cash payments to families in their spending plan.

Democrats are insisting they won't renew the nation's ability to pay its bills on their own. The debt limit refers to the amount the US can borrow to pay off existing debts. Raising it does not authorize future spending. They also flatly dismissed scrapping Biden's sprawling domestic agenda in exchange for GOP support to lift the debt ceiling as a non-starter.

"Senate Republicans are holding our economy hostage," Rep. Don Beyer of Virginia, chair of the Joint Economic Committee, said in a tweet. "Mitch McConnell claimed he isn't making demands for lifting the debt ceiling, but Susan Collins gave the game away: They're demanding the President abandon the agenda the American people elected him to pass."

"This reflects the general attitude of the Republican conference to burn it all down when out of power," a Senate Democratic aide granted anonymity to speak candidly told Insider.

The impasse over the debt limit heightened on Monday as Biden assailed Senate Republicans for blocking Democratic efforts to approve a debt limit hike with bipartisan support. He called it "hypocritical, dangerous, and disgraceful" during a Monday press conference.

He also couldn't guarantee the US would be able to avoid a potentially catastrophic default. "That's up to Mitch McConnell," he said.

Democrats have sharply challenged the GOP's rationale for opposing lifting the debt cap, arguing both parties are responsible for piling onto the federal debt with emergency spending during the pandemic and domestic spending increases under President Donald Trump. Republicans also lifted or suspended the debt ceiling three times under the Trump administration.

Democrats are able to lift the debt ceiling on their own. But it could be a time-consuming endeavor stretching on for at least two weeks with no guarantee they can successfully pull it off ahead of an Oct. 18 default deadline due to the strict guidelines governing reconciliation.

Read the original article on Business Insider