The U.S. debt limit is heading for an increase, as lawmakers in Washington acted Tuesday ahead of a key deadline to avoid an unprecedented default.
The Senate approved a bill raising the debt limit by $2.5 trillion, setting up a separate vote by the House that would send legislation to President Joe Biden for signature.
The increase in the debt limit punts the issue past the November 2022 midterm elections.
“The resolution we will vote on will provide for a raising of the debt limit to a level commensurate with funding necessary to get into 2023,” said Senate Majority Leader Chuck Schumer, a New York Democrat, before the vote.
Treasury Secretary Janet Yellen had urged Congress to raise the borrowing limit before Wednesday, saying she believed she would run out of room to avoid the first-ever U.S. default soon after.
Last week, Biden signed a bill that was designed to allow Democrats to raise the U.S. debt limit on their own. Democrats control 50 Senate seats, and Vice President Kamala Harris may break any ties in the chamber. The deal allowing Democrats to raise the debt limit was the product of talks between Schumer and Senate Minority Leader Mitch McConnell, a Kentucky Republican.
No Senate Republicans voted for the debt-limit increase on Tuesday. The vote was 50-49.
Democrats “want to create even more inflation on their own. So, as Republicans have made clear for months, they will have to own a debt ceiling increase as well,” McConnell said last week.
Schumer has said his party wants to pass the debt-limit increase “to pay the debts we have already incurred, just like any household must do.”