Trump's surprise debt ceiling deal paves the way for another showdown

Investing.com - U.S. President Donald Trump’s surprise agreement with Democrats to raise the government debt limit until December has set the stage for another showdown on the debt ceiling in December.On Wednesday Trump stunned Republicans by forcing through a deal proposed by Democrats to fund the U.S. government and raise the debt limit for three months, in addition to providing emergency funding for victims of Hurricane Harvey.Republican leaders, as well as U.S. Treasury Secretary Steve Mnuchin had been pushing for a longer-term increase of the debt limit.Under the agreement, Congress will seek to advance a bill that funds the government and raises the debt ceiling until December 15, in a temporary move to avoid a government shutdown.Although they did not endorse the deal, Republican leaders said they would go along with Trump’s wishes.But Trump’s decision to side with Democrats over the objections of GOP leaders is likely to ratchet up tensions between the president and his fellow Republicans. The short-term extension also paves the way for a second vote in one year on a debt limit increase, historically a politically divisive process.If Congress does not raise the debt limit, the government risks running out of money to pay its bills. Missing payments could send financial markets in a tailspin.