Congress lifts debt-ceiling on same day as deadline that risked plunging country into economic chaos

The House raised the debt ceiling early Wednesday morning, staving off an economic disaster just ahead of a deadline.

The limit on how much the government can borrow was lifted by the body. Only one Republican supported the measure. The Senate passed it along party lines.

The increase will be sent to President Joe Biden for his signature after the late-night vote. It saves the US economy from a crisis just hours before the cutoff. The Treasury Secretary warned that the government would hit the debt ceiling on December 15 if it didn't raise it.

The next debt-ceiling battle is expected to take place after next year's elections. The Build Back Better plan would add roughly $1.75 trillion to the deficit, but only a small amount of the related borrowing would happen before 2022.

The debt ceiling limits how much the government can borrow. Republicans pushed Democrats to raise the ceiling on their own through the reconciliation process, which was close to hitting the limit. McConnell offered Democrats a 2-month extension in October to avoid default.

The latest fix was even more novel. Last week, Congress approved a rule change that will allow Senate Democrats to raise the ceiling with a simple majority. The measure allowed Republicans to say they didn't vote to raise the ceiling, but it allowed Democrats to avoid catastrophe.

The senator told reporters that the Republicans agreed to the rule change in exchange for a large sum of money.

Fourteen Senate Republicans voted with Democrats to pass the one-off reform, but other GOP members raised concerns over the deal striking a new precedent. The agreement struck by McConnell and Schumer to lift the limit was a mistake, and it was "cynical" to connect the measure to Medicare funding, according to Sen. Josh Hawley of Missouri.

Lindsey Graham told Insider that changing Senate procedure was not the way to go.

The debt ceiling won't be a problem for the country for now. A self-imposed default would be bad for the economy. If the ceiling is hit, payments to government workers and service members could be frozen, Social Security payouts could be stopped, and the US dollar could be destroyed. Without the last-minute votes, the country could've plunged into a new and unprecedented recession.