Democrat from New York, Chuck Schumer, the Senate Majority Leader, speaks at a press conference held at the U.S. Capitol in Washington, D.C. on Saturday, March 6, 2021. Bloomberg
On Thursday, the Senate approved a bill that would allow the U.S. to avoid defaulting on its debt within the next few weeks. In the most important vote of the night, 11 Republicans joined 50 Democrats to provide at least 60 votes to end the debate and pass the bill to its final passage. This required a simple majority. All of the Republicans who voted for the end of debate also voted to approve the final bill. Because Sen. Richard Burr, a North Carolina Republican, was absent, Democrats only needed 50 votes to pass the final bill. The U.S. faces economic disaster if Congress fails to raise or suspend its borrowing limit by Oct. 18, Treasury secretary Janet Yellen warned. Thursday's legislation was approved by the Senate, which would prevent the nation reaching its debt limit before December.
The agreement allows for the debt limit to rise by $480 billion. This amount, according to the Treasury Department, will allow it pay bills up to Dec. 3. The national debt currently stands at $28.4 trillion. It would be allowed to increase to $28.8 trillion. Now, the bill moves to the House where Speaker Nancy Pelosi (D-Calif.) is expected to vote on the legislation within the next few days. CNBC reached out to Pelosi's office for clarification on when the House speaker will vote on the Senate-passed legislation. The House is expected to approve the Senate version of the bill and forward it to President Joe Biden by the Oct. 18 drop-dead deadline. After weeks of futile bickering, congressional leaders finally reached a compromise on Wednesday when Senate Minority Leader Mitch McConnell (Republican from Kentucky) proposed that the debt limit be extended until December. Although the debt ceiling doesn't authorize any new spending, it allows the Treasury Department and Congress to pay for existing legislation. Republicans have been trying to force Democrats to raise the debt limit despite this fact in recent weeks. Republicans want Democrats to increase the borrowing cap via budget reconciliation. This could lead to Democrats being held responsible for a large portion of the national debt before the 2022 midterm elections. Republicans believe that Democrats should shoulder the responsibility for raising the debt ceiling, given the Biden administration’s plans to increase climate and anti-poverty spending through reconciliation.