Congress votes to increase debt limit ahead of critical deadline

By Maureen Chowdhury and Melissa Macaya, CNN

Updated 12:38 a.m. ET, December 15, 2021
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4:19 p.m. ET, December 14, 2021

Here's what could happen if the country defaults on its debt

From CNN's Matt Egan and Phil Mattingly

A mild recession, according to analysts, would likely be the best-case scenario in the event of the US government defaulting on its debts, a limit the country is expected to reach next month and for which Congress must act to increase.

The worst case scenario would involve downstream effects of potentially cascading job losses, a shut down in tens of billions in Covid-19 economic recovery aid still set to be delivered, a near-freeze in credit markets and gross domestic product taking a tangible hit that could last for multiple quarters.

"No one would be spared," Maya MacGuineas, president of the Committee for a Responsible Federal Budget, told CNN. "It would be such a self-imposed disaster that we wouldn't recover from, all at a time when our role in the world is already being questioned."

If the Treasury defaults and the impasse drags on, the federal government would have to enact "devastating" spending cuts that would cause a "cataclysmic" situation for the economy, Moody's Analytics warned this week.

Moody's estimates nearly 6 million jobs would be lost, the unemployment rate would spike back to nearly 9% and stock prices would plummet by one-third, wiping out about $15 trillion in household wealth.

Failure to raise the debt ceiling in time could halt payments that millions of Americans rely on, including paychecks to federal workers, Medicare benefits, military salaries, tax refunds, Social Security checks and payments to federal contractors.

Republicans have steadfastly opposed supplying votes to raise the debt ceiling, despite pleas from officials and watchdogs about the disastrous consequences for defaulting or delaying such action.

Read more about the impacts here.

4:42 p.m. ET, December 14, 2021

These were the 14 GOP senators that broke a filibuster to advance the debt limit fast-track process

From CNN's Ali Zaslav and Lauren Fox

The Senate voted last Thursday to advance a bill to create a fast-track process allowing Democrats to raise the federal debt limit, a crucial next step as lawmakers race the clock to avert a catastrophic debt default.

To get there, the plan's supporters needed to break a GOP filibuster, which required 60 votes to succeed. The vote tally was 64 to 36, meaning 14 Senate Republicans crossed the aisle to vote with Democrats, who control only 50 seats in the chamber.

These are the 14 Senate Republicans who crossed the aisle to vote to advance the debt limit fast-track process bill:

  • John Thune of South Dakota
  • Mitch McConnell of Kentucky
  • John Barrasso of Wyoming
  • Roger Wicker of Mississippi
  • Shelley Moore Capito of West Virginia
  • Susan Collins of Maine
  • Roy Blunt of Missouri
  • Thom Tillis of North Carolina
  • Lisa Murkowski of Alaska
  • Richard Burr of North Carolina
  • Joni Ernst of Iowa
  • John Cornyn of Texas
  • Mitt Romney of Utah
  • Rob Portman of Ohio
4:15 p.m. ET, December 14, 2021

Key things to know about the Senate's bill to increase the debt limit — and what happens next

From CNN's Clare Foran and Ali Zaslav

The Senate voted on Tuesday to advance a bill to raise the national debt limit by $2.5 trillion and extend it into 2023 as lawmakers race to avert a catastrophic default ahead of a critical mid-week deadline.

Here some key things to know:

What happens next in Congress: A final Senate vote to approve the debt limit increase is happening now in the chamber. The House will next have to approve the same legislation before it can be sent to President Joe Biden to be signed into law.

Why this matters: Treasury Secretary Janet Yellen has warned that the debt limit could be reached on December 15, leaving Congress little time left to resolve the issue. A first-ever default would spark economic disaster and party leaders on both sides of the aisle have made clear it must be prevented.

What the bill does: Senate Majority Leader Chuck Schumer said on Tuesday that the Senate will vote to raise the debt ceiling to a level that will extend the limit into 2023. The resolution that Democrats plan to vote on increases the limit by $2.5 trillion.

HIt had been expected that Democrats would raise the limit by an amount sufficient to ensure that the issue will not need to be addressed again until after the 2022 midterm elections.

How we got here: Republicans have insisted that Democrats should take responsibility for raising the limit and do it on their own. In response to that demand from Republicans, Congress passed legislation last week to create a fast-track process that will allow Democrats to raise the debt limit on their own in the Senate without help from Republicans.

The newly created and temporary one-time process will allow Senate Democrats to take up and pass a bill to increase the debt limit by a specific dollar amount and a simple majority vote — or 51 votes if all senators are present and voting. Senate Democrats control 50 seats in the chamber and Vice President Kamala Harris can break tie votes.

Schumer announced on Monday that the vote to raise the debt limit will take place on Tuesday.

"Last week, we advanced bipartisan legislation that will enable this chamber to address the debt ceiling on a fast-track basis. For the information of all, the Senate will act tomorrow to prevent default," he said.