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U.S. Senate passes, sends Biden bill paving way for debt limit hike

Stock MarketsDec 10, 2021 12:50AM ET
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© Reuters. FILE PHOTO: The U.S. Capitol building is seen in Washington, U.S., November 16, 2021. REUTERS/Elizabeth Frantz/File Photo

By Susan Cornwell and Moira Warburton

WASHINGTON (Reuters) -The U.S. Senate on Thursday passed and sent to President Joe Biden the first of two bills needed to raise the federal government's $28.9 trillion debt limit and avert an unprecedented default https://www.reuters.com/markets/us/what-happens-if-washington-falls-behind-its-bills-2021-12-03.

The Senate voted 59-35 for the measure, with 10 Republicans, including Minority Leader Mitch McConnell, backing the bill, which allows an upcoming vote on raising the debt ceiling to pass the chamber with a simple majority. McConnell said earlier this week that he believed the procedure was in the best interests of the country because it avoids default.

The Democratic-led House of Representatives approved the legislation on Wednesday night by 222-212, with only one Republican backing it.

Biden is expected to promptly sign the unusual procedural measure that paves the way for the second bill, which would actually increase government borrowing authority, to pass in coming days.

"I want to be clear, this is about paying debt accumulated by both parties. So I'm pleased we were able to facilitate a process with the supportive members from both parties that avoids needless and catastrophic default," the chamber's top Democrat, Majority Leader Chuck Schumer, said in a speech after the vote on the measure, which he had negotiated with McConnell.

"This was a bipartisan process, and I hope there can be more and I want to thank Leader McConnell for working with us in good faith to get to this point," Schumer said.

Treasury Secretary Janet Yellen has urged Congress to raise the limit before next Wednesday and Congress now appears to be on track to achieve that.

Final votes on the second, debt-limit implementing bill are expected in the Senate and House by Tuesday.

Republicans have been maneuvering for months to try to force Democrats to raise the debt limit on their own, seeking to link the move to Biden's proposed $1.75 trillion "Build Back Better" domestic spending bill.

Democrats note that the legislation is needed to finance substantial debt incurred during Donald Trump's administration, when Republicans willingly jacked up Washington's credit card bill by about $7.85 trillion, partly through sweeping tax cuts and spending to fight the COVID-19 pandemic.

Still to come in the prolonged legislative battle is a disclosure of the actual dollar amount for the new cap on Treasury's borrowing, which is expected to cover Washington's expenses through the 2022 midterm elections that will determine control of Congress.

'RIGHT THING TO DO'

Republican Senator Lisa Murkowski, who is up for re-election in Alaska next year, told reporters that she voted earlier with 13 other Republicans to advance the first bill because "it was the right thing to do."

She added that at a time when Russia is amassing troops on its border with Ukraine, "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."

Some Republicans, including Senator Shelley Moore Capito, said they were backing the measure because it included provisions to avoid cuts otherwise set to take place next year in the Medicare healthcare program for the elderly.

But Republican Senator Mike Rounds said he voted no because "they (Democrats) have been spending money on a partisan basis without input from Republicans. So they have the obligation to increase the debt ceiling at this point."

The break in the legislative deadlock came just two months after Congress agreed on a short-term lift to the debt ceiling, to avert an unprecedented default by the federal government on its obligations, which would have dire implications for the world economy.

In recent years, lawmakers have squirmed over raising the statutory limit on the country's growing debt, fearing voter backlash.

The emergence in 2010 of the conservative, small-government "Tea Party" movement increased the rancor in Congress over such legislation, even as lawmakers voted for tax cuts and spending increases that contribute to the debt.

U.S. Senate passes, sends Biden bill paving way for debt limit hike
 

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Comments (3)
Matthew Price
Matthew Price Dec 10, 2021 4:25AM ET
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rip us dollar
Tre Hsi
Tre Hsi Dec 09, 2021 10:05AM ET
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we all knew good old Mitch would just fold under pressure whenever there is a mention of another govt shutdown.....seeing the last one went so well for him and the mango messiah.....
Trevor Roberts
LimitUp Dec 09, 2021 10:05AM ET
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Why do communist supporters bother reading news about capitalism
David David
David9 Dec 09, 2021 10:05AM ET
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Explain yourself...
David David
David9 Dec 09, 2021 10:05AM ET
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replying to LimitUp... what do you mean...
By designe
Bydesigne Dec 09, 2021 10:05AM ET
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Everything you disagree with is explained away as communism. Don't like tomato on your sandwich...its communism.
Tre Hsi
Tre Hsi Dec 09, 2021 10:05AM ET
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Trevor Roberts  "....news about capitalism" -  only someone so clueless would think a news article about a govt raising its national debt ceiling = capitalism
jason xx
jason xx Dec 09, 2021 8:04AM ET
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this could get ugly
Me comment
Me comment Dec 09, 2021 8:04AM ET
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repos are always ugly
 
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