Senate passes historic bill tying cuts to debt deal; Obama set to sign it
** FILE ** The U.S. Capitol is seen just after the House voted to pass debt legislation on Capitol Hill in Washington, on Monday, Aug. 1, 2011. (AP Photo/Jacquelyn MartinHemmed in by the looming threat of an historic government default, the Senate on Tuesday passed a $2 trillion-plus debt extension and sent it to the White House, where President Obama was poised to sign it later in the afternoon — just in time to keep federal borrowing and spending on track.
The bipartisan 74-26 vote followed Monday’s equally strong vote of support in the House, and ratifies the agreement Mr. Obama and the four top party leaders in Congress reached this weekend to cut about $1 trillion in future spending and set up a process to cut more than $1 trillion more, coupled with an up to $2.4 trillion increase in the federal debt-ceiling limit.
Republican supporters said the deal makes history by being the first time that spending cuts have been attached to a debt-limit increase, and said that is now the new standard every future administration will have to meet.
“Never again will any president from either party be allowed to raise the debt ceiling without being held accountable for it by the American people,” said Senate Minority Leader Mitch McConnell, Kentucky Republican.
Democrats, meanwhile, took heart in playing defense: They said they kept the cuts lower than they otherwise would have been, and staggered them so the deeper bites come in the later years of this decade.
“My vote for this legislation does not come without some pain,” said Sen. Richard J. Durbin of Illinois, the second-ranking Democrat in the chamber, saying he was conflicted between the dangers of default versus the depth of cuts that will ensue from the new spending limits included in the bill.
Six Democrats and one liberal independent voted against the bill, saying the pain in the bill wasn’t worth it and fearing that the next fight — which will play out over the rest of this year — could threaten Social Security and Medicare.
Nineteen Republicans voted against the bill in the Senate, saying it was a missed opportunity.
“Talk is different than outcomes. What we need are outcomes. What we need is fundamental change to the way we spend money in Washington,” said Sen. Mike Lee, Utah Republican and one of a number of freshman Republicans who, energized by their recent election, led the fight against the measure.
Running 74 pages, the bill amounts to a $32.4 billion debt increase per page, for a total possible debt increase of $2.4 trillion.
On the cuts side, it instantly imposes discretionary spending limits for the next decade, for savings of $917 billion, and sets up a new congressional committee that would be charged with finding an additional $1.5 trillion in savings or new revenue.
If the committee fails to act, or Congress fails to pass their recommendations, new cuts would go into effect, split across defense and non-defense spending, totaling more than $1 trillion.
In Tuesday’s vote, the consequences of failing to raise the debt limit motivated those on both sides.
“This is not a perfect plan, but it’s something we need to have right now,” said Sen. Bill Nelson, Florida Democrat. “Government spending must be cut. The public debt must be reduced – otherwise our economy will not recover and America will no longer be in good standing around the world.”
Sen. Kent Conrad, North Dakota Democrat, told colleagues that every percentage-point increase in interest rates would mean an additional $1.3 trillion in interest payments.
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