- The Senate on Thursday approved a bill to help the US avoid defaulting on its debt over the next few weeks.
- The agreement allows the loan limit to be raised to $480 billion, an amount the Treasury Department estimates will allow bills to be paid by December 3.
- The bill now goes to the House, where Speaker Nancy Pelosi, D-Calif., is expected to take legislation early next week.
The Senate on Thursday approved a bill to help the US avoid defaulting on its debt over the next few weeks.
In the night’s most consequential vote, 11 Republicans joined all 50 Democrats to end the debate and provide the minimum 60 votes needed for final passage of the bill, which required a simple majority.
None of the Republicans who voted to end the debate also voted to pass the final bill. But for that, Democrats needed only 50 votes, because at least one Republican, Sen. Richard Burr of North Carolina, was not present.
America risks economic disaster if Congress does not raise or suspend borrowing limits by October 18, Treasury Secretary Janet Yellen has warned. Senators on Thursday signed legislation that would prevent the country from reaching its debt limit until early December.
The agreement allows the loan limit to be raised to $480 billion, an amount the Treasury Department estimates will allow it to pay bills by December 3. The current national debt is approximately $28.4 trillion and would be allowed to increase to about $28.8 trillion.
The bill now goes to the House, where Speaker Nancy Pelosi, D-Calif., is expected to take legislation early next week.
A spokesman for Pelosi’s office did not respond to CNBC’s request for guidance when the Speaker of the House plans to vote on the bill passed by the Senate.
Still, the House is widely expected to approve the Senate’s version of the bill and send it to President Joe Biden before the drop-dead date of October 18.
Congressional leaders made a breakthrough on Wednesday after weeks of fruitless bickering when Senate Minority Leader Mitch McConnell, R-Ky. proposed to extend the loan limit till December.
The debt limit does not authorize new government spending, but allows the Treasury Department to pay for legislation Congress has already passed.
Despite this fact, Republicans have in recent weeks tried to force Democrats to address the debt ceiling without their support.
The GOP wants Democrats to raise the borrowing limit through budget reconciliation, a process that could reveal that Democrats are responsible for an outsized portion of the national debt ahead of the 2022 midterm elections.
Republicans also say that the burden of raising the debt limit should rest with Democrats, who plan to pass trillions into the climate of the Biden administration and anti-poverty spending through reconciliation.
President Joe Biden in turn attacked Republicans, saying that debt ceiling legislation should be bipartisan. Democrats noted that they supported three debt limit suspensions during the Trump administration, under which national Debt increased by $7.9 trillion.
Democrats have struggled to expand the 50-50 Senate borrowing limit through normal process because they require 60 votes to pass most legislation.
They may also dislike the idea of addressing the debt limit through conciliation because it would force them to assign a dollar value to the new debt limit level.
The short-term deal will bring some relief to both the parties.
Democrats will buy themselves more time to fix intraparty disagreements over their multitrillion-dollar health, education and climate package, and pass a parallel bipartisan infrastructure bill in the House.
For their part, Republicans believe the short-term bill will marry Democrats to a longer-term reconciliation bill to raise the debt limit in December as Biden and Senate Majority Leader Chuck Schumer, DN. Time to grab both your legislative targets and debt limits.