Senate passes bill to increase debt limit through early December

The Senate passed a short-term bill to increase the nation’s debt limit through to Dec. 3, avoiding an economic catastrophe. CNBC’s Ylan Mui reports. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

The Senate on Thursday approved a bill to help the U.S. avoid a default on its debt in the next few weeks.

In the most consequential vote of the night, 11 Republicans joined all 50 Democrats to provide the minimum 60 votes needed to end debate and move the bill to final passage, which required a simple majority.

None of the Republicans who voted to end debate also then 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.

The U.S. risks economic calamity if Congress doesn’t raise or suspend the borrowing limit by Oct. 18, Treasury Secretary Janet Yellen has warned. Senators signed off on legislation Thursday that would keep the nation from reaching its debt limit until early December.

The agreement allows the debt limit to increase by $480 billion, a sum the Treasury Department estimates will allow it to pay bills until Dec. 3. The current national debt is about $28.4 trillion and would be permitted to rise to about $28.8 trillion.

The bill now moves to the House, where Speaker Nancy Pelosi, D-Calif., is expected to take up the legislation early next week.

A spokesman for Pelosi’s office did not respond to CNBC’s request for guidance on when the House speaker plans to hold a vote on the Senate-passed bill.

Still, the House is widely expected to approve the Senate’s version of the bill and send it to President Joe Biden before the Oct. 18 drop-dead date.

Congressional leaders reached a breakthrough after weeks of fruitless bickering on Wednesday, when Senate Minority Leader Mitch McConnell, R-Ky., proposed extending the debt limit until December.

The debt ceiling does not authorize new government spending, but allows the Treasury Department to pay for legislation Congress has already passed.

Despite that fact, Republicans have tried in recent weeks to force Democrats to address the debt limit without their support.

The GOP wants Democrats to raise the borrowing cap through budget reconciliation, a process that could make it appear Democrats are responsible for an outsized portion of the national debt ahead of the 2022 midterm elections.

Republicans also say that the burden to raise the debt ceiling should rest with Democrats given the Biden administration’s plans to pass trillions in climate and anti-poverty spending via reconciliation.

President Joe Biden has attacked Republicans in turn and said that debt ceiling legislation ought to be bipartisan. Democrats note they supported three debt ceiling suspensions during the Trump administration, under which the national debt ballooned by $7.9 trillion.

Democrats have struggled to extend the borrowing cap in the 50-50 Senate through usual procedure since they need 60 votes to advance most legislation.

They may also dislike the idea of addressing the debt limit through reconciliation since it would force them to assign a dollar value to the new debt ceiling level.

The short-term deal will allow both sides some relief.

Democrats would 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 since Biden and Senate Majority Leader Chuck Schumer, D-N.Y., will be hard pressed to claim they lacked time to juggle both their legislative goals and the debt ceiling.

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