Senate votes to lift debt ceiling by $480 billion

Senators voted to approve a short-term increase to the federal debt ceiling on Thursday night, ending a weekslong standoff on Capitol Hill and likely averting a default that could have triggered a recession.

Senate Democrats passed the $480 billion increase by a simple majority vote of 50-48. The vote on the final measure occurred after 11 GOP lawmakers joined Democrats in a vote to invoke cloture, clearing the 60-vote filibuster threshold.

The 11 Republicans who voted to allow the measure to proceed were Senate Minority Leader Mitch McConnell, Minority Whip John Thune, John Cornyn, Lisa Murkowski, Shelley Moore Capito, Richard Shelby, Rob Portman, Susan Collins, John Barrasso, Mike Rounds and Roy Blunt.

The bill will now proceed to the House, where lawmakers could consider it by as early as next week. The $480 billion increase is enough to fund the government through at least early December. 

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Senate Majority Leader Chuck Schumer, D-NY, said the successful vote "avoided a first-ever, Republican-manufactured default on the national debt." He pledged to continue work toward passing President Biden's infrastructure and social spending bills.

"With America honoring its full faith and credit: Senate Democrats are continuing our work to Build Back Better, help people and families, fight climate change, create the good-paying jobs of tomorrow, and rekindle that optimism that has long been the core of America's identity," Schumer wrote on Twitter.

Treasury Secretary Janet Yellen and other business leaders had warned of a potential economic catastrophe if Congress did not raise the debt ceiling by Oct. 18 when the U.S. federal government would run out of cash to cover its obligations.

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Republicans blocked multiple attempts to raise the debt ceiling in recent days, with GOP leaders arguing the Democrats should use the budget reconciliation process to suspend the borrowing limit without their help. With progress stalled, some Democrats floated the possibility of altering filibuster rules in order to pass the debt limit extension, but moderate Sen. Joe Manchin of West Virginia said he would not support that effort.

As the default deadline approached, McConnell offered to drop GOP opposition if Democrats raised the debt limit by a fixed dollar amount, buying Schumer and his allies more time to find a longer-term solution.

Democrats claimed victory after McConnell’s offer went public, with some claiming he had "caved" to political pressure. Some GOP lawmakers accused McConnell of giving up his leverage and capitulating to Democratic demands.

"This is a complete capitulation," Sen. Lindsey Graham, R-S.C., told Fox News' Jason Donner on Thursday. "The argument made yesterday was, well, this may be more pressure than two Democratic senators can stand regarding changing the filibuster rules. That, to me, is not a very good reason."

During the standoff, McConnell and other Republicans said they would not cast votes to raise the debt limit, arguing it would ease the Biden administration's path to excessive spending programs. Democrats rejected that argument, asserting a borrowing suspension would allow the government to cover debts already incurred.

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If the House passes the bill, Congressional lawmakers will have several more weeks to raise the debt ceiling beyond December. Despite McConnell's insistence, Democrats claim they will not use the reconciliation process to address the borrowing limit as part of Biden's spending bill.

With the debt situation addressed for now, Democrats also will resume unilateral efforts to negotiate a compromise between moderates and progressives on Biden's spending bill. The president has told House lawmakers that a spending threshold of roughly $1.9 trillion to $2.2 trillion was likely necessary to placate both sides.