Congress votes to increase debt limit ahead of critical deadline

By Maureen Chowdhury and Melissa Macaya, CNN

Updated 12:38 a.m. ET, December 15, 2021
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12:38 a.m. ET, December 15, 2021

House votes to increase debt limit, averting a catastrophic default

From CNN's Clare Foran, Ali Zaslav, Kristin Wilson and Morgan Rimmer

House votes on the debt ceiling past midnight on December 15, 2021
House votes on the debt ceiling past midnight on December 15, 2021 (House TV)

Just hours after the Senate voted, and with less than a day before the deadline was reached, the House passed legislation to raise the debt limit by $2.5 trillion and extend it into 2023.

The final vote was 221-209. GOP Rep. Adam Kinzinger of Illinois was the lone member to break ranks and vote with Democrats.

The bill now heads to President Biden’s desk.

Treasury Secretary Janet Yellen had warned that the debt limit could be reached on Dec. 15. A first-ever default would spark economic disaster and party leaders on both sides of the aisle made clear it must be prevented.

More on the debt ceiling vote: Republicans had insisted, however, that Democrats take responsibility for raising the limit and do it on their own. In response, Congress passed legislation last week to create a fast-track process to allow Democrats to raise the debt limit in the Senate without help from Republicans.

12:05 a.m. ET, December 15, 2021

House is voting on Senate-passed legislation to raise the debt limit

From CNN's Clare Foran and Ali Zaslav

The House is voting now to approve legislation to raise the national debt limit by $2.5 trillion and extend it into 2023 as lawmakers race to avert a catastrophic default ahead of a critical midweek deadline.

The Senate voted earlier today to advance the bill.

Once the measure passes in the House, it can be sent to President Biden to be signed into law.

How we got to this vote: Senate Majority Leader Chuck Schumer said earlier on Tuesday that the Senate would vote to raise the debt ceiling to a level that will extend the limit into 2023.

It had been expected that Democrats would raise the limit by an amount sufficient to ensure that the issue will not need to be addressed again until after the 2022 midterm elections.

A newly created and temporary one-time process that lawmakers approved allowed Senate Democrats to take up and pass a bill to increase the debt limit by a specific dollar amount and a simple majority vote.

5:21 p.m. ET, December 14, 2021

Senate votes to increase debt limit by $2.5 trillion

From CNN's Clare Foran and Ali Zaslav

Senate Majority Leader Charles Schumer talks to reporters following the weekly Senate Democratic policy luncheon at the U.S. Capitol on December 14, in Washington, DC. (Chip Somodevilla/Getty Images)
Senate Majority Leader Charles Schumer talks to reporters following the weekly Senate Democratic policy luncheon at the U.S. Capitol on December 14, in Washington, DC. (Chip Somodevilla/Getty Images)

The Senate voted on Tuesday to raise the national debt limit by $2.5 trillion and extend it into 2023 as lawmakers race to avert a catastrophic default ahead of a critical midweek deadline.

The vote took place after a one-time, fast-track process was put in place to allow Senate Democrats to act alone to increase the debt limit without votes from Republicans.

As a result, this only required a simple majority to pass. The final tally was 50 to 49.  

The House will next have to approve the legislation before it can be sent to President Joe Biden to be signed into law.

Treasury Secretary Janet Yellen has warned that the debt limit could be reached on December 15, leaving Congress little time left to resolve the issue. A first-ever default would spark economic disaster and party leaders on both sides of the aisle have made clear it must be prevented.

Republicans have insisted, however, that Democrats take responsibility for raising the limit and do it on their own. In response, Congress passed legislation last week to create a fast-track process to allow Democrats to raise the debt limit in the Senate without help from Republicans.

Read more here.

4:22 p.m. ET, December 14, 2021

Senate is voting now to increase debt limit by $2.5 trillion

From CNN's Clare Foran, Ali Zaslav and Ted Barrett

The Senate is now voting on final passage of a resolution to increase the debt limit by $2.5 trillion, which will extend the limit into 2023.

The vote is taking place after a one-time, fast-track process was put in place to allow Senate Democrats to act alone to increase the debt limit without votes from Republicans.

As a result, this only requires a simple majority to pass. 

The Hill team will alert when the Senate vote is done. The measure will next have to go to the House.

4:34 p.m. ET, December 14, 2021

What we know about the deal McConnell reached with Democrats to raise the debt ceiling

From CNN's Clare Foran, Manu Raju, Ted Barrett and Annie Grayer

Congress has been struggling on and off with how to address the debt limit for over the past few months.

In October, lawmakers passed a short-term debt limit extension into December after Democrats and Republicans reached a deal to avert economic disaster following weeks of partisan deadlock over the issue.

The extension passed after Republicans first argued that Democrats should act alone to address the debt limit through a process known as budget reconciliation. Democrats rejected that idea, arguing that the issue is a shared bipartisan responsibility and that the process would be too lengthy and unwieldy, making the risk of miscalculation too high.

But Senate Minority Leader Mitch McConnell warned President Biden in October in a letter that Democrats should not expect Republicans to help again.

Democrats, however, held firm and continued to resist pressure from Republicans to pursue dealing with the debt limit through the time-consuming reconciliation process in the weeks that followed.

Earlier last week, McConnell rejected the idea that by brokering a new deal to stave off default with Democrats he has reversed his earlier position of saying that Republicans would not help Democrats deal with the issue.

"The red line is intact. The red line is that you have a simple majority, party-line vote on the debt ceiling. That's exactly where we will end up," he said last Tuesday.

"I think this is in the best interest of the country by avoiding default. I think it is also in the best interest of Republicans," McConnell said. "I believe we've reached here a solution to the debt ceiling issue that's consistent with Republican views of raising the debt ceiling for this amount at this particular time and allows the Democrats to proudly own it, which they are happy to do."

Why this matters: Treasury Secretary Janet Yellen has warned the debt limit could be reached on December 15 — otherwise the US would suffer financial catastrophe and endure its first-ever default.

The legislative gymnastics to avoid a default underscore how Republicans in particular are eager to avoid both an economic calamity and the backlash for casting a politically toxic vote of raising the borrowing limit.

Read more about the debt ceiling plan here.

4:19 p.m. ET, December 14, 2021

Here's what could happen if the country defaults on its debt

From CNN's Matt Egan and Phil Mattingly

A mild recession, according to analysts, would likely be the best-case scenario in the event of the US government defaulting on its debts, a limit the country is expected to reach next month and for which Congress must act to increase.

The worst case scenario would involve downstream effects of potentially cascading job losses, a shut down in tens of billions in Covid-19 economic recovery aid still set to be delivered, a near-freeze in credit markets and gross domestic product taking a tangible hit that could last for multiple quarters.

"No one would be spared," Maya MacGuineas, president of the Committee for a Responsible Federal Budget, told CNN. "It would be such a self-imposed disaster that we wouldn't recover from, all at a time when our role in the world is already being questioned."

If the Treasury defaults and the impasse drags on, the federal government would have to enact "devastating" spending cuts that would cause a "cataclysmic" situation for the economy, Moody's Analytics warned this week.

Moody's estimates nearly 6 million jobs would be lost, the unemployment rate would spike back to nearly 9% and stock prices would plummet by one-third, wiping out about $15 trillion in household wealth.

Failure to raise the debt ceiling in time could halt payments that millions of Americans rely on, including paychecks to federal workers, Medicare benefits, military salaries, tax refunds, Social Security checks and payments to federal contractors.

Republicans have steadfastly opposed supplying votes to raise the debt ceiling, despite pleas from officials and watchdogs about the disastrous consequences for defaulting or delaying such action.

Read more about the impacts here.

4:42 p.m. ET, December 14, 2021

These were the 14 GOP senators that broke a filibuster to advance the debt limit fast-track process

From CNN's Ali Zaslav and Lauren Fox

The Senate voted last Thursday to advance a bill to create a fast-track process allowing Democrats to raise the federal debt limit, a crucial next step as lawmakers race the clock to avert a catastrophic debt default.

To get there, the plan's supporters needed to break a GOP filibuster, which required 60 votes to succeed. The vote tally was 64 to 36, meaning 14 Senate Republicans crossed the aisle to vote with Democrats, who control only 50 seats in the chamber.

These are the 14 Senate Republicans who crossed the aisle to vote to advance the debt limit fast-track process bill:

  • John Thune of South Dakota
  • Mitch McConnell of Kentucky
  • John Barrasso of Wyoming
  • Roger Wicker of Mississippi
  • Shelley Moore Capito of West Virginia
  • Susan Collins of Maine
  • Roy Blunt of Missouri
  • Thom Tillis of North Carolina
  • Lisa Murkowski of Alaska
  • Richard Burr of North Carolina
  • Joni Ernst of Iowa
  • John Cornyn of Texas
  • Mitt Romney of Utah
  • Rob Portman of Ohio
4:15 p.m. ET, December 14, 2021

Key things to know about the Senate's bill to increase the debt limit — and what happens next

From CNN's Clare Foran and Ali Zaslav

The Senate voted on Tuesday to advance a bill to raise the national debt limit by $2.5 trillion and extend it into 2023 as lawmakers race to avert a catastrophic default ahead of a critical mid-week deadline.

Here some key things to know:

What happens next in Congress: A final Senate vote to approve the debt limit increase is happening now in the chamber. The House will next have to approve the same legislation before it can be sent to President Joe Biden to be signed into law.

Why this matters: Treasury Secretary Janet Yellen has warned that the debt limit could be reached on December 15, leaving Congress little time left to resolve the issue. A first-ever default would spark economic disaster and party leaders on both sides of the aisle have made clear it must be prevented.

What the bill does: Senate Majority Leader Chuck Schumer said on Tuesday that the Senate will vote to raise the debt ceiling to a level that will extend the limit into 2023. The resolution that Democrats plan to vote on increases the limit by $2.5 trillion.

HIt had been expected that Democrats would raise the limit by an amount sufficient to ensure that the issue will not need to be addressed again until after the 2022 midterm elections.

How we got here: Republicans have insisted that Democrats should take responsibility for raising the limit and do it on their own. In response to that demand from Republicans, Congress passed legislation last week to create a fast-track process that will allow Democrats to raise the debt limit on their own in the Senate without help from Republicans.

The newly created and temporary one-time process will allow Senate Democrats to take up and pass a bill to increase the debt limit by a specific dollar amount and a simple majority vote — or 51 votes if all senators are present and voting. Senate Democrats control 50 seats in the chamber and Vice President Kamala Harris can break tie votes.

Schumer announced on Monday that the vote to raise the debt limit will take place on Tuesday.

"Last week, we advanced bipartisan legislation that will enable this chamber to address the debt ceiling on a fast-track basis. For the information of all, the Senate will act tomorrow to prevent default," he said.