Democrats cleared legislation Wednesday to raise the statutory debt limit by $2.5 trillion, an amount intended to give the Treasury Department enough borrowing room to make it past the midterm elections and into 2023.
The House voted 221-209 to send the measure to President Joe Biden.
The vote came shortly after midnight after the Senate voted along party lines, 50-49, Tuesday afternoon to send the measure to the House.
The votes marked a tidy conclusion to the debt limit drama after months of partisan fighting and uncertainty that rattled financial markets.
If the debt limit wasn't raised in time and the Treasury Department ran out of cash, the government would have to prioritize which financial obligations to meet. While U.S. bondholders might get their interest payments on time, other benefits might not go out, amounting to fiscal tightening that some economists said could spark a recession.
Treasury Secretary Janet L. Yellen had told lawmakers she needed them to raise the borrowing cap by around Dec. 15, or face the possibility of missed payments. Thanks to a bipartisan truce worked out in the Senate last week, Congress was ready to act just before the deadline.
"Responsible governing has won on this exceedingly important issue," Senate Majority Leader Charles E. Schumer, D-N.Y., said. "The American people can breathe easy and rest assured there will not be a default."
The $2.5 trillion figure would be the largest dollar increase in debt ceiling history, bigger than the $2.1 trillion lawmakers agreed to raise the limit by in three stages as part of a 2011 deficit-cutting package (PL 112-25). It would be a smaller percentage boost than the 2011 law or a 2010 measure (PL 111-139) that raised the limit by $1.9 trillion, each of which lifted the borrowing cap by roughly 15 percent.
Raising the debt ceiling past $30 trillion for the first time, to nearly $31.4 trillion, is likely to feature prominently in GOP campaign ads as the measure will become law without help from Republicans. During debate, Senate Minority Leader Mitch McConnell tied the vote to pending action on a roughly $2.2 trillion social spending and climate package, largely financed by tax increases and rampant inflation.
"If they jam through another reckless taxing and spending spree, this massive debt increase will just be the beginning. More printing and borrowing to set up more reckless spending to cause more inflation, to hurt working families even more." McConnell, R-Ky., said on the floor.
Behind the scenes
Despite such rhetoric, Schumer and McConnell worked behind the scenes to cut a deal creating a temporary exemption to the Senate’s cloture rules for this debt ceiling increase.
That mechanism was attached to separate legislation since a number of Senate Republicans wouldn't give unanimous consent to allow debate on a debt limit bill, and there weren't enough Senate Republicans to vote for cloture, which requires 60 votes.
At first, McConnell and Schumer discussed attaching the provision to the fiscal 2022 defense authorization measure (S 1605), but that plan ran into pushback from Republicans who didn't want to tie the popular defense bill to a debt limit vote that would cause them angst back home.
In the end, they agreed to include the provision in a separate bill delaying automatic cuts in Medicare and other politically sensitive programs like farm price supports. Those cuts would have been triggered under the 2010 and 2011 laws that contained the previous largest debt limit increases in dollar terms.
Another selling point for Republicans was getting Democrats to agree to a dollar figure, rather than suspending the debt limit until a future date as had been the practice since 2013.
The other way around the Senate's filibuster rules would have been through the budget reconciliation process, which Republicans insisted for months Democrats would have to use.
Democrats said since both parties have contributed to running up the debt, it was a bipartisan responsibility to raise the debt limit, which Congress has done 99 times since 1940 including a short-term patch that became law (PL 117-50) in October, according to Office of Management and Budget records.
"As I have said repeatedly, this is about paying debt accumulated by both parties," Schumer said.
When one party has controlled the executive and legislative branches, however, it's typically been a more partisan process.
In 1993, Democrats had majorities on Capitol Hill and President Bill Clinton in the White House. They attached a debt limit increase to a major reconciliation bill including tax increases that passed on party-line votes in both chambers.
In 2003, 2004 and 2006, Republicans were in control at both ends of Pennsylvania Avenue. They used the "Gephardt rule" in the House to automatically send the Senate debt limit legislation without recorded votes upon adoption of a budget resolution in 2003 and 2006. In 2004, the House passed a debt limit increase along strict party lines.
In the Senate during the George W. Bush years, Democrats agreed not to filibuster the debt limit bills — unlike Republicans this year. Just two conservative Senate Democrats, Sens. John Breaux of Louisiana and Zell Miller of Georgia, voted for the 2003 and 2004 increases, though Republicans had enough votes to pass them on their own. No Democrats supported the 2006 measure.
In late 2009 and early 2010, majority Democrats had the House and 60 Senate votes on their side for much of that time. No House Republicans voted for debt limit increases in those years.
In early 2009 when the ailing Sen. Edward M. Kennedy, D-Mass., was absent and former Sen. Al Franken, D-Minn., was fighting a recount battle and hadn't yet been seated, Democrats needed a little GOP help to pass their economic stimulus package — also the vehicle for a debt limit increase. They ultimately secured votes from Maine GOP Sens. Susan Collins and Olympia J. Snowe, as well as Pennsylvania's Arlen Specter, who switched parties later that year.
Senate Democrats and Republicans worked out deals in advance to avoid separate cloture votes on two other debt limit bills, but still required 60 votes on final passage.
A short-term patch passed on Christmas Eve 2009; one Democrat, Sen. Evan Bayh of Indiana, voted "no" but Republican Sen. George Voinovich of Ohio backed the measure. The larger 2010 increase, attached to the statutory pay-as-you-go law that was waived last week as part of the expedited debt limit process bill, became law with no Republican votes.
Chris Cioffi, Peter Cohn, Paul M. Krawzak and David Lerman contributed to this report.