Senate takes up debt limit bill, passage likely

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WASHINGTON (AP) — With just hours left before the national debt

bumps against its ceiling, emergency bipartisan legislation to

allow the government to borrow more faces one final test in the

Senate. Expected passage there sends the bill to President Barack

Obama, averting a potentially disastrous, first-ever government

default and making a down payment toward taming out-of-control

budget deficits.

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The legislation, which easily passed the House on Monday, is

virtually assured to clear the Senate shortly after noon Tuesday by

a bipartisan tally. The White House promises Obama will sign the

measure into law.

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The legislation pairs an increase in the government’s borrowing cap

with promises of more than $2 trillion of budget cuts over the

upcoming decade. Its passage caps a long, difficult battle between

tea party-powered House Republicans and Obama – with House Speaker

John Boehner caught in the middle more than once.

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After months of fiercely partisan struggle, the House’s top

Republican and Democratic leaders swung behind the bill, ratifying

a deal sealed Sunday night with a phone call from Boehner to

Obama.

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“I’m not happy with it,” Minority Leader Nancy Pelosi, D-Calif.,

said. “But I’m proud of some of the accomplishments in it. That’s

why I’m voting for it.”

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Amid the high intrigue of the historic moment, the drama was

heightened even further when Rep. Gabrielle Giffords, the Arizona

congresswoman wounded in a shooting rampage seven months ago, made

a surprise visit to the House floor to cast her vote. Colleagues on

both sides of the aisle rushed to her side to embrace her, and

Pelosi saluted her courage and resiliency.

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Much of the House-passed measure was negotiated on terms set by

Boehner, which included a demand that any increase in the nation’s

borrowing cap be matched by spending cuts at least as large. But it

also meets demands made by Obama, including debt increases large

enough to keep the government funded into 2013 and curbs on growth

of the Pentagon budget.

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Even though Obama strongly supported the measure, half of the

chamber’s Democrats opposed it. Sixty-six conservative Republicans

opposed the measure as well.

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Still, after storming the Capital in January – only to see bill

after bill die in the Democratic Senate – many junior House

lawmakers opted to view the legislation through the prism of

optimism.

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“It’s about time that Congress come together and figure out a way

to live within our means,” said Rep. Sean Duffy, R-Wis. “This bill

is going to start that process, although it doesn’t go far

enough.”

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The measure would provide an immediate $400 billion increase in the

$14.3 trillion U.S. borrowing cap, with $500 billion more assured

this fall. That $900 billion would be matched by cuts to agency

budgets over the next 10 years.

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What follows next is more complicated. The measure establishes a

special bipartisan committee to draft legislation to find up to

$1.5 trillion more in deficit cuts for a vote later this year.

They’re likely to come from so-called mandatory programs like

federal retirement benefits, farm subsidies, Medicare and Medicaid.

The savings would be matched by a further increase in the borrowing

cap.

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There’s no guarantee the committee, to be evenly split between the

warring parties, will agree on such legislation. But there are

powerful incentives to do so because more budget gridlock would

trigger a crippling round of automatic cuts across much of the

budget, including Pentagon coffers.

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And questions linger about the effect the grueling political

free-for-all will have on the U.S. credit rating.

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Treasury Secretary Timothy Geithner told ABC News in an interview

that he didn’t know whether the debt-limit fight would cause

America’s AAA credit rating to be downgraded. “It’s not my judgment

to make,” he said. Geithner also said he fears world confidence in

the United States was damaged by “this spectacle.”

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The vote during Monday’s dinner hour in the capital came after

intense efforts at persuasion by the administration.

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The White House dispatched Vice President Joe Biden to the Capitol

to lobby recalcitrant Democrats in both House and Senate. He heard

an earful, especially from liberal and black lawmakers upset that

Obama surrendered on taxes and agreed to cuts from a budget ledger

built up over the first two years of his term, when Democrats

dominated Congress.

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“They expressed all their frustration,” he conceded after a session

with House Democrats.

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Biden said the deal “has one overwhelming redeeming feature” –

postponing the next debt limit battle until 2013 and leaving the

current fight behind. “We have to get this out of the way to get to

the issue of growing the economy,” he said.

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Rep. Jan Schakowsky, D-Ill., said the Republicans got the better of

the deal.

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“Republicans intentionally created a crisis in order to get their

way,” Schakowsky said. “This is the wrong medicine for a sick

economy. This bill could increase unemployment, slow economic

growth and deepen already historic income inequality.”

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GOP leaders lobbied their members as well, but with Democratic

leaders and Obama behind the legislation, there was far less

pressure on them than last week, when they were forced to delay a

vote and rewrite an earlier version of the measure to assuage tea

party lawmakers.

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“This measure is not perfect or the way we would have done it if we

were in charge, but it will finally begin to change the way

Washington spends taxpayer dollars,” House Majority Leader Eric

Cantor, R-Va., said. “As is the case with any major change, these

things will take time and this is the first significant move – of

many to come – to turn Washington around.”

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In the Senate, support from Majority Leader Harry Reid, D-Nev., and

GOP leader Mitch McConnell of Kentucky virtually guarantees the

measure will receive the 60 votes required to pass on Tuesday. The

vote is set for noon, plenty of time to ship the measure up

Pennsylvania Avenue to Obama. The administration has said that

without the new borrowing authority, the government won’t be able

to pay all its bills after Tuesday.

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Enactment of the measure would provide welcome closure for Obama,

who has seen his poll numbers sag during the debt limit battle –

especially as Tuesday’s deadline neared and the stock market

sank.

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GOP presidential candidates such as Mitt Romney and Michele

Bachmann issued statements opposing the legislation.

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“As with any compromise, the outcome is far from satisfying,” Obama

conceded in a video his re-election campaign sent to millions of

Democrats.

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In a tweet, the president was more positive: “The debt agreement

makes a significant down payment to reduce the deficit – finding

savings in both defense and domestic spending.”

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