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 Final action in the Senate followed an hour-long nail-biting
procedural tally forced by the objections of Republican Ted Cruz, a
conservative Tea Party favorite. It appeared at first there would
not be enough Republicans to join the Democratic majority and
advance the bill.
A decision by Senate Republican leader Mitch McConnell and Senate
Republican Whip John Cornyn, who are both up for re-election this
year, to vote to advance the measure appeared to kick the procedural
tally over the needed 60 votes.
After a few more tense minutes of huddling on the Senate floor,
several other Republicans changed their votes to follow their
leadership. In the end, 12 Republicans joined Democrats in advancing
the bill, on a vote of 67-31.
The measure, which then passed the Senate on a final, party-line
vote of 55-43, now goes to Obama to be signed into law.
The House of Representatives, where Republicans hold a majority,
passed the measure in a close vote a day earlier, after Republicans
dropped the confrontational tactics they had used in similar votes
over the past three years.
The advance of the measure this week has brought relief to financial
markets. Investors were becoming increasingly jittery ahead of
February 27, the date by which the U.S. Treasury had been warning
its borrowing authority would be exhausted, putting federal payments
at risk.
Without an increase in the statutory debt limit, the U.S. government
would soon default on some of its obligations and have to shut down
some programs, a historic event that would have likely caused severe
market turmoil.
Reaction in most financial markets to the drama on the Senate floor
was muted, with U.S. stocks holding near the unchanged mark on the
day and most U.S. Treasury debt prices remaining modestly lower for
the session.
But there was visible relief in the short-term interest rate market.
The rate on the one-month Treasury Bill, which had jumped in the
past week on concern over a protracted showdown over raising the
debt ceiling, dropped to its lowest in three weeks, ending the day
at just 0.01 percent.
Obama welcomed the vote, but said Republican efforts to use the debt
limit increase as leverage to achieve other policy goals had been
damaging and should be abandoned. Since 2011, Republicans have
linked raising the borrowing cap to spending cuts or cutbacks to the
president's signature healthcare law, and the dispute at one point
led to a downgrade of the pristine U.S. credit rating.
"The full faith and credit of the United States is too important to
use as leverage or a tool for extortion," Obama said in a statement.
"Hopefully, this puts an end to politics by brinksmanship and allows
us to move forward to do more to create good jobs and strengthen the
economy."
Treasury Secretary Jack Lew said in a statement that Congress'
action would boost economic growth by making businesses and
investors more confident.
CRUZ WANTED CONDITIONS ON DEBT CEILING
Obama and his fellow Democrats have demanded that the debt ceiling
be raised without any conditions. But Republican Cruz, whose
influence helped push Congress into a government shutdown in
October, objected to a simple-majority vote on the debt limit
because he wanted to attach "meaningful conditions" that would help
reduce U.S. deficits.
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Because of an approaching snowstorm, senators agreed to waive the
required debate time and hold the procedural vote on Wednesday, with
the final vote immediately following it.
After the results were in, some Republicans said their party was
furious with Cruz for forcing a number of them to cast votes that
could open them up to attacks from Tea Party conservatives opposed
to any debt limit increase whatsoever.
"He accomplished nothing except forcing a number of Republicans to
swallow hard and show some courage," one aide said.
Both McConnell and Cornyn face conservative opposition in upcoming
primary elections. McConnell's primary opponent, Matt Bevin, wasted
no time in putting out a statement denouncing the senator's move,
saying: "Kentucky deserves a senator that will not keep voting to
suffocate our children and grandchildren with trillions of dollars
in debt."
The Senate Conservatives Fund, a political action committee founded
by ex-Senator Jim DeMint, also hit McConnell, tweeting that "Mitch
McConnell just voted with the Democrats to advance yet another debt
limit increase. Kentucky deserves better."
Cruz, who is from Texas, made no apologies for his maneuver and said
failure of the procedural vote would have presented an opportunity
to address Washington's spending problems.
"The next step would have been, I believe, that we would have come
together to work on meaningful structural reforms to address the
out-of-control spending," Cruz told reporters.
Senator Bob Corker, a Tennessee Republican who cast a "yes" on the
procedural vote, told reporters that after McConnell had voted for
the measure, discussions took place on the Senate floor and then
other Republicans stepped in to "help him out".
Republicans who switched their votes from "no" to "yes" included
Senator John McCain of Arizona, who joked later that his shoulder
had been dislocated in arm-twisting on the Senate floor.
McCain said much of the discussion in the tense Republican huddles
focused on getting past the debt limit to issues where Republicans
could gain more political traction, such as healthcare.
"Nobody persuades me," McCain said of his vote. "I just thought it
was the right thing to do."
(Additional reporting by Richard Cowan, Thomas Ferraro and Mark
Felsenthal; editing by Paul Simao, Peter Cooney, Jonathan Oatis and
Mohammad Zargham)
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