The US Senate voted on Tuesday night to increase the government’s borrowing limit to $2.5 billion, in an 11-hour effort to prevent default before the end of the year.
The Senate vote, which is expected to be expedited by a second vote in the House, comes one day ahead of a December 15 deadline set by Janet Yellen, US Treasury Secretary, who had been warning for weeks about the risks of a government. default.
Democrats and Republicans have for months been at odds over the debt ceiling, with the GOP insisting that President Joe Biden’s party “goes it alone” in raising the limit, while blaming Democrats for spending. reckless consumption.
But bipartisan congressional leaders achieved a breakthrough last week when a key mass of Republicans agreed to a one-time rule change allowing Democrats to raise the debt ceiling using a simple majority, rather than being required to pass the 60-vote threshold in the Senate. The deal has sharply divided Republicans, with only 14 GOP lawmakers signing up to change the procedure.
No Republicans voted to raise the debt limit when the matter came before the Senate on Tuesday, and the opposition is expected to support the measure in a subsequent vote in the House. held by the Democratic Party. The bill would have to be signed into law by Biden to take effect.
Senate Majority Leader Chuck Schumer said on Tuesday that the proposed measure to raise the debt limit by $2.5 billion would fund the government for at least another year — delaying any no further debt ceiling adjustments until after next year’s midterm elections.
“The resolution that we will vote on will raise the debt limit to a level commensurate with the capital needed to reach 2023,” Schumer said.
“This is about paying off the accumulated debt on both sides, so I’m glad Republicans and Democrats have worked together to facilitate a process,” he added. settle the debt ceiling.”
In recent weeks, some market participants have sought to limit their exposure to U.S. government debt maturing around a probable default. But last week’s two strong bidding sessions for four- and eight-week Treasury bills suggest that any investors worried about volatility related to the debt ceiling have subsided.
Tuesday’s vote is the latest in a long list of hurdles Congress needs to address before the Christmas holidays. Earlier this month, lawmakers took action to prevent a government shutdown, vote to fund the government early next year and delay another confrontation over the federal budget. Members of Congress are also expected to vote as soon as this week on a separate measure to continue funding the US military.
It’s still unclear if Democrats can push Biden’s ambitious $1.75 billion Rebuild the bill for better social spending. Democratic leaders insisted they could pass the measure before the end of the year, but their optimism was dashed by a handful of opponents from their own party, especially Joe. Manchin, senator from West Virginia.
Manchin and Biden spoke privately on both Monday and Tuesday as the White House tried to secure a deal to please the West Virginia senator, who took issue with both the size and scope of the bill. spending in the context of increased consumption. price.
Additional reporting by Colby Smith in Washington