Senate passes short-term increase in U.S. debt ceiling

The U.S. Senate approved legislation Thursday that pulls the nation from the brink of a first-ever payment default with a short-term debt-ceiling increase, breaking a weekslong stalemate that rattled financial markets.

The vote was 50-48, with no Republicans in favor of the measure that simply kicks the can toward another precarious debt-limit fight in less than two months. The $480 billion increase in statutory borrowing would run out around Dec. 3.

The debt limit increase still needs a vote in the House, which is currently on a break through next week. However House leaders have told lawmakers that they could be called back to Washington within 72 hours. It’s expected to pass there, and the White House said President Joe Biden looked forward to signing into law.

“Republicans played a risky and partisan game, and I am glad their brinkmanship didn’t work,” Senate Majority Leader Chuck Schumer said after the bill cleared a procedural hurdle.

Schumer and Minority Leader Mitch McConnell struck a deal for the legislation earlier Thursday. News of the accord early sparked a rally in the stock market. The S&P 500 charted a third day of gains as the chances of an economically devastating tightening in fiscal policy abated — at least for now.

The timeline sets up a collision course where various fiscal and policy battles will play out roughly simultaneously. funding for government operations also expires on Dec. 3, risking a government shutdown unless lawmakers can complete agency budgets for this fiscal year. Also, Democrats could be trying to push through Biden’s broad economic package around that time.

McConnell had to work up until almost the last minute to get a sufficient number of Republicans to vote for a procedural motion — called cloture — to cut off debate and advance the debt ceiling legislation to the floor. In the, McConnell and 10 other Republicans voted to clear the way for the bill.

In a foreshadowing of the pitched battle in store in December, McConnell faced blowback from some members of his party, who said he had caved to the Democrats and others who didn’t want their fingerprints on the deal as they face possible primary challenges next year.

Sen. Ted Cruz of Texas, who doesn’t face election until 2024, called McConnell’s deal with Schumer “a mistake.”

“We were all standing together and making clear that Democrats had complete authority to raise the debt ceiling, and to take responsibility for the trillions of debt that they are irresponsibly adding to this country,” Cruz said. “Schumer was on the verge of surrender. And unfortunately, the deal that was put on the table was a lifeline for Schumer.”

Sen. John Thune of South Dakota, the chamber’s No. 2 Republican, said that while there was enough GOP support to let the vote on passage happen, that’s as far as it went.

“It’s obvious nobody likes this issue,” Thune said. “There aren’t any Republicans in my time here that like dealing with the debt limit.”