WASHINGTON—Republicans blocked Democrats’ latest effort to raise the debt limit, intensifying a high-stakes showdown in the Senate hours after Treasury Secretary Janet Yellen told lawmakers the government would be unable to pay all of its bills on time starting Oct. 18 unless Congress acts.
With Senate Republicans having lined up against the debt-limit increase, the developments raise pressure on Democratic leaders to find a backup plan to avoid a default on U.S. obligations. That could include adding a debt-ceiling measure to an already complicated package to bypass a GOP filibuster in the Senate, or exploring other, unprecedented approaches to keep the federal government liquid.