Senate Clears Last Major Hurdle to Raising Debt Ceiling

Senate Clears Last Major Hurdle to Raising Debt Ceiling 1

Ending a monthslong impasse, lawmakers from both parties approved legislation that would let Congress raise the debt ceiling by a simple majority vote.

WASHINGTON — The Senate on Thursday cleared away the last major hurdle to raising the debt ceiling, approving legislation that would all but guarantee that Congress will be able to move quickly in the coming days to steer the government away from a first-ever federal default.

The breakthrough came after 14 Republicans joined every Democrat to effectively end their party’s monthslong blockade of debt-limit legislation, allowing the bill to advance in the 50-50 Senate. The legislation later passed by a similar margin, 59 to 35, with 10 Republicans joining Democrats for final passage.

President Biden is expected to quickly sign the bill into law. It would establish a one-time fast-track process for Congress to increase the statutory borrowing limit by a set amount that is still to be determined.

That would pave the way for a separate vote to raise the limit by as much as $2.5 trillion, expected early next week. It puts Congress on track to avoid a fiscal crisis with little time to spare. The Treasury Department has said that it could breach the statutory debt limit soon after Dec. 15, and would no longer be able to finance the government’s obligations.

Thursday’s vote broke through months of politically charged wrangling in the Senate, where Republicans had refused for months to let Democrats take up any long-term debt ceiling increase, using the filibuster to block their efforts to do so.

The stalemate ended this week, when Senator Mitch McConnell, the Kentucky Republican and minority leader, cut a deal with leading Democrats on a convoluted process that would allow the borrowing cap to be raised on a simple majority vote. That way the measure could pass with only Democrats supporting it, rather than subjecting it to the 60-vote threshold that applies to most major legislation.

Mr. McConnell was among the 10 Republicans who voted both to advance and pass the legislation, amid recriminations from lawmakers and activists in his party who said it was a betrayal.

The measure was packaged with legislation that would postpone scheduled cuts to Medicare, farm aid and other mandatory spending programs, a sweetener for reluctant Republicans who have held firm against giving Democrats the ability to raise the debt ceiling.

“No brinksmanship, no default on the debt, no risk of another recession — responsible governing won the day,” said Senator Chuck Schumer, the New York Democrat who is the majority leader, after the vote. Earlier in the day, he thanked Mr. McConnell for the “fruitful, candid, productive” discussions that led to the agreement.

For Democrats, it was a crucial step toward completing a slew of must-pass bills this month, coming after Republicans and Democrats clinched an agreement on the annual defense policy legislation earlier this week, and on the heels of enacting a stopgap spending measure to fund the government until mid-February. Democrats were eager to focus their full attention on muscling through Mr. Biden’s marquee domestic policy legislation before Christmas, though the prospects for doing so were murky.

While Democrats have not said how much they will increase the borrowing cap, it is expected that they will try to delay another fiscal standoff until after the midterm elections next year. One Treasury estimate suggested they would need to raise it by as much as $2.5 trillion to cover that period, according to a person familiar with the preliminary accounting who disclosed it on the condition of anonymity.

The legislative contortions were necessary because of Republicans’ intransigence on the debt limit. Given that Democrats are using the fast-track budget reconciliation process to muscle through Mr. Biden’s $2.2 trillion climate, tax and social spending bill over their opposition, Republicans had demanded that Democrats use the same maneuver to address the debt limit.

Democrats objected, arguing that both parties were responsible for raising the borrowing cap to accommodate spending that had been approved by and incurred under both Republican and Democratic administrations. Reconciliation, they added, would be an unnecessarily complex and time-consuming way to do so.

In October, Mr. McConnell relented temporarily, corralling 10 of his colleagues to join him in breaking his own party’s filibuster of a short-term increase to the debt limit, which then passed with only Democratic votes. But he warned in a scathing letter to Mr. Biden that he would not do so again. Two Republicans who supported the measure in October, Senators Richard C. Shelby of Alabama and Mike Rounds of South Dakota, withheld their votes on Thursday.

“They could do this through reconciliation without any Republican support,” Mr. Rounds told reporters ahead of the vote. “We bailed them out by calling the question last time to give them an opportunity to do so, and yet they seem to have simply sat back and expected that we would once again provide special opportunities for them.”

Mr. McConnell and Mr. Schumer began quietly discussing alternatives in November, including the possibility of attaching a debt-limit increase to the annual defense policy bill, the last must-pass piece of legislation trudging through Congress before the end of the year.

Congressional leaders announced the deal on Tuesday and the House then passed the measure with all but one Republican voting in opposition.

Several Republicans seethed over the agreement, accusing Mr. McConnell and his allies of caving and warning that the maneuver would set up a dangerous precedent that could erode the rules of the Senate filibuster that have long protected the minority party.

“It sure as hell sets in motion playing with the rules of the Senate in a fashion that I never even thought of until 24 hours ago,” said Senator Lindsey Graham, Republican of South Carolina. “I want to make this hard, not easy, because I think what we’re doing is going to really change the structure of the Senate and certainly going to do a lot of damage to the Republican Party.”

But as he did in October, Mr. McConnell was able to scrounge together support from a coalition that included members of his leadership team, centrists and retiring lawmakers. Republicans said that as long as Democrats took responsibility for the final vote raising the limit, they would be satisfied, promising to use the vote as a political cudgel in the midterm elections.

The Republicans who broke with their party on Thursday included some of the same ones who had supported Mr. McConnell’s move in October: Senators John Thune of South Dakota, John Barrasso of Wyoming, Susan Collins of Maine, Lisa Murkowski of Alaska, Rob Portman of Ohio, Shelley Moore Capito of West Virginia, and Roy Blunt of Missouri.

“We don’t need to be sending signals anywhere in the world that we’re not going to back the full faith and credit in the United States,” Ms. Murkowski told reporters after the vote.

Some Republicans who had opposed taking up the short-term debt limit increase ended up voting for the measure, including Senators Thom Tillis of North Carolina and Mitt Romney of Utah.

A few Republicans were swayed by the decision to package the debt limit process with the postponement of mandatory cuts to a range of federal spending programs, including community block grants, farm aid and a 4 percent reduction in Medicare payments to doctors and hospitals. The legislation would also extend a temporary pay increase in Medicare implemented earlier in the pandemic, allowing doctors and hospitals to keep their current pay rates until April, when the cut begins to phase out.

Two Republicans, Joni Ernst of Iowa and Roger Wicker of Mississippi, voted to advance the measure, but opposed final passage. Another two Republicans, Richard M. Burr of North Carolina and John Cornyn of Texas, were absent for the final vote, but joined their colleagues in voting to take up the measure.