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Senate clears expedited debt limit process, Medicare cuts delay

Lawmakers still need to pass separate debt ceiling increase by next week to avoid Treasury cash crunch

Senate Minority Leader Mitch McConnell speaks during the a news conference in the Capitol on Tuesday, Nov. 30, 2021. Behind McConnell, from left, are Sens. John Barrasso, R-Wyo., John Thune, R-S.D., and Joni Ernst, R-Iowa.
Senate Minority Leader Mitch McConnell speaks during the a news conference in the Capitol on Tuesday, Nov. 30, 2021. Behind McConnell, from left, are Sens. John Barrasso, R-Wyo., John Thune, R-S.D., and Joni Ernst, R-Iowa. (Bill Clark/CQ Roll Call)

The Senate broke a logjam over the statutory debt limit Thursday, clearing a measure that would allow Democrats to increase the nation’s borrowing capacity on their own without any Republican assistance necessary.

On a 59-35 vote, the Senate sent President Joe Biden a bill granting a one-time exemption to Senate rules so that a debt ceiling increase can go straight to final passage on a simple majority vote, rather than first having to clear a 60-vote procedural hurdle.

Passage of the fast-track process legislation effectively ends weeks of partisan brinkmanship over whether and how to raise the statutory debt limit. Without congressional relief, the government may be unable to meet all its financial obligations after Dec. 15, Treasury Secretary Janet L. Yellen has warned.

Democrats have yet to release the bill that will actually raise the debt limit, though Senate Majority Leader Charles E. Schumer and Speaker Nancy Pelosi hope to clear that measure before Wednesday to meet Yellen’s deadline.

The legislation heading to the White House also would delay Medicare cuts that would otherwise be triggered Jan. 1, including across-the-board reductions to provider reimbursements as well as separate cuts to physician and laboratory services payments. It would temporarily waive statutory pay-as-you-go rules that would require steeper Medicare cuts next year as well as major reductions in farm price supports and a host of other federal benefits.

Final passage came after a critical procedural vote, in which 14 Republicans joined all Democrats on a cloture motion to limit debate. That bipartisan cooperation — on a deal brokered by Schumer and Minority Leader Mitch McConnell — cleared the way for Democrats to be able to increase the debt limit on their own and avoid a fiscal crisis.

Schumer thanked McConnell for the agreement in floor remarks Thursday, saying their talks were “fruitful, candid, productive.”

“The proposal I worked on with Leader McConnell will allow Democrats to do precisely what we’ve been seeking to do for months… provide a simple majority vote to fix the debt ceiling without having to resort to a convoluted, lengthy and ultimately risky process,” Schumer said.

McConnell began drawing battle lines over the debt limit this summer, alerting Democrats that Republicans didn’t intend to cooperate on any debt limit bill unless Democrats stopped work on their roughly $2 trillion climate and social spending reconciliation bill. If they continued to work on that package, he said, they should use the same fast-track budget reconciliation process to advance a debt limit bill.

Democrats vowed not to use the reconciliation process for the debt limit or to stop work on their tax and spending package. The intransigence placed Congress in a deadlock over the debt limit as the Treasury Department inched closer to running out of money to pay all of the country’s bills in October.

Republicans later agreed that month to provide the votes needed to limit debate on a short-term patch, raising the debt limit by $480 billion, though Democrats passed the measure on their own.

[Debt limit patch cleared for Biden, setting up year-end battle]

Schumer’s floor speech before the final vote on that legislation infuriated Republicans, leading McConnell to send a letter to Biden saying that he would “not be a party to any future effort to mitigate the consequences of Democratic mismanagement.”

Twists and turns

McConnell and Schumer began talking about the debt limit in mid-November and announced agreement earlier this week on the temporary loophole for a debt limit bill. As part of the agreement, Democrats must raise the debt limit by a specific amount and not suspend it through a future date.

The procedural debt limit agreement was then attached to language that would stave off spending cuts to Medicare, causing additional frustration among GOP lawmakers who support that section of the bill.

Nearly all House Republicans — with the exception of retiring Illinois Rep. Adam Kinzinger — voted against the measure Tuesday, railing against the agreement that McConnell brokered with Schumer.

The deal went over a little better with Senate Republicans, though the majority of them took issue with it. 

During debate Wednesday, Republican senators including John Kennedy of Louisiana and Lindsey Graham of South Carolina sought consent to offer alternative measures that would preserve the delay in Medicare and other cuts but drop the debt limit process language. Democrats objected.

Kennedy said his proposal would “protect Medicare and other programs from harmful cuts” without allowing for increased borrowing room to accommodate more partisan spending in the reconciliation bill Democrats want to enact before the end of this year.

“If Democrats want to raise the debt ceiling to fund trillions of dollars in extra spending while inflation is ravaging American families, they can do it themselves,” Kennedy said.

 Many Republicans argued that McConnell should have extracted some sort of concession from Democrats to help them advance a debt limit bill outside the reconciliation process, or forced them to use budget reconciliation.

In addition to McConnell, Republican Sens. John Barrasso, Wyo.; Roy Blunt, Mo.; Richard M. Burr, N.C.; Shelley Moore Capito, W.Va.; Susan Collins, Maine; John Cornyn, Texas; Joni Ernst, Iowa; Rob Portman, Ohio; Lisa Murkowski, Alaska; Mitt Romney, Utah; John Thune, S.D.; Thom Tillis, N.C.; and Roger Wicker, Miss., voted for cloture. The final tally was 64-36.

Ten of the 14 Republicans who crossed the aisle to support cloture earlier also voted for the bill on final passage, while Ernst and Wicker voted against it and Burr and Cornyn were absent.

There were some notable differences on Thursday’s vote from the October cloture vote, when 11 Republicans voted to let the short-term patch advance.

On Thursday, GOP Sens. Richard C. Shelby of Alabama and Mike Rounds of South Dakota switched to vote against cloture on the expedited process bill. But it didn’t matter because four GOP senators flipped from “nay” in October to “yea” on Thursday: Ernst, Romney, Tillis and Wicker. Burr, who was absent from the October vote, also voted for cloture on Thursday.

Legislation to actually raise the debt limit has not yet been released and negotiations are ongoing about how much more borrowing capacity Democrats need to include to hold off another debt limit vote until after next year’s midterm elections. Based on past projections by the Bipartisan Policy Center, that could require something in the ballpark of $2 trillion.

“We still have a few more steps to take before we completely resolve this matter, but I’m optimistic that after today’s vote we’ll be on a glide path to avoid a catastrophic default,” Schumer said Thursday.

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