Senate passes deal to raise the debt limit

Legislation to raise the nation's $14.3 trillion debt ceiling became law Tuesday after the Senate easily approved it in a 74-26 bipartisan vote.

President Obama signed the measure without ceremony shortly after receiving it, with the White House announcing the news via Twitter. No members of Congress attended the signing of legislation, which will cut federal spending by $2 trillion over the next decade and raise the nation's borrowing limit through the 2012 presidential election.

Final passage failed to sooth jittery markets, as the Dow Jones Industrial Average suffered a 266-point loss that continued its losing streak.

Forty-five Senate Democrats joined 28 Republicans and one Independent in supporting the measure, one day after most of the House GOP voted to approve the package.

Lawmakers in both chambers on Tuesday were already turning their attention to who will be appointed to a new committee created by the law and charged with assembling an additional $1.5 trillion in deficit cuts.

Democrats are quickly falling into two camps. Some liberals want their leaders to sit on the committee and defend their party’s cherished programs. Other Democrats want “new faces” on the panel who will be more likely to reach a comprehensive budget-cutting agreement with Republicans. 

Republicans, meanwhile, are divided between those who are willing to reduce the deficit through tax-code reforms and those who want to take a hard line against any possible tax increases. 

So far congressional leaders, who have two weeks to make their selections to the 12-member bicameral panel, are keeping their calculations secret. 

The joint committee is the brainchild of Senate Majority Leader Harry ReidHarry ReidBill O'Reilly: Politics helped kill Kate Steinle, Zarate just pulled the trigger Tax reform is nightmare Déjà vu for Puerto Rico Ex-Obama and Reid staffers: McConnell would pretend to be busy to avoid meeting with Obama MORE (D-Nev.), who introduced it during debt-limit negotiations with Senate Republican leader Mitch McConnellAddison (Mitch) Mitchell McConnellGOP strategist donates to Alabama Democrat McConnell names Senate GOP tax conferees Brent Budowsky: A plea to Alabama voters MORE (Ky.) and House Speaker John BoehnerJohn Andrew BoehnerJohn Feehery: A political forest fire Trump's pick for Federal Reserve chief is right choice at right time The two-party system is dying — let’s put it out of its misery MORE (R-Ohio). 

Reid, McConnell, BoehnerJohn Andrew BoehnerJohn Feehery: A political forest fire Trump's pick for Federal Reserve chief is right choice at right time The two-party system is dying — let’s put it out of its misery MORE and House Democratic leader Nancy Pelosi (Calif.) will each make three selections to what is being called the “super committee.” 

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Reid drew a line in the sand Tuesday by declaring that if the committee did not agree to raise additional tax revenues, a broader deficit-reduction package would not pass this Senate. If the committee fails to produce a budget-cutting plan worth at least $1.5 trillion that can pass Congress, it would trigger up to $1.2 trillion in automatic spending cuts, divided evenly between defense and non-defense programs.

Democrats are betting that the prospect of huge defense cuts will give Republicans incentive to agree to ending corporate tax breaks to reduce the deficit. 

Reid said he would pick members with “open minds,” and urged GOP leaders to do the same.

“The members, I say here, must have open minds,” Reid said. “We’ve had too much talk the last few days of Republicans, as early as this morning, Republican leaders in the Senate saying there will be no revenue. That’s not going to happen. Otherwise, the trigger is going to kick in.”

McConnell told reporters Tuesday afternoon that he will work with Senate Republican Whip Jon Kyl (Ariz.) to choose the Senate GOP’s representatives on the joint committee.

Many lawmakers are skeptical the committee will reach agreement by its deadline of Nov. 23, but McConnell expressed optimism. “The joint committee is not going to gridlock, in my opinion,” he said. “The joint committee is designed to function and to tackle some of the very difficult problems that we have been unwilling or unable to deal with.”

McConnell downplayed the prospect of the committee recommending tax increases, a fear of many conservatives in both chambers whose suspicions are heightened by the fact that the idea for the panel came from Democrats. 

At a press conference Tuesday, Pelosi said she would appoint members who strongly oppose cuts to Social Security, Medicare and Medicaid. 

“Let me say it is more than a priority. It is a value,” she said of protecting entitlement programs. “It’s an ethic for the American people. It is one that all of the members of our caucus share, so that I know that whoever’s at that table will be someone who will fight to protect those benefits.”

The hard-line stances Republicans have taken against tax increases and Democrats have adopted against entitlement reforms have fueled skepticism about the special panel reaching agreement.

Some lawmakers speculate that Reid might appoint Senate Finance Committee Chairman Max BaucusMax Sieben BaucusBooker tries to find the right lane  Top Lobbyists 2017: Hired Guns GOP tries to keep spotlight on taxes amid Mueller charges MORE (D-Mont.) and Appropriations Committee Chairman Daniel Inouye (D-Hawaii). Reid appointed them to deficit-reduction talks with Vice President Biden and GOP leaders earlier this year. It could be viewed as a slight to those chairmen if they were left out of major talks affecting spending and tax decisions that fall squarely in their jurisdiction. 

Some veteran lawmakers want members of the Senate leadership to sit on the special committee, to ensure that its decisions take into account the priorities of the entire Democratic Conference. 

“It should be the leadership of our caucus, it shouldn’t be committee chairmen,” Sen. Tom HarkinTom HarkinDemocrats are all talk when it comes to DC statehood The Hill's 12:30 Report Distance education: Tumultuous today and yesterday MORE (D-Iowa) said. “It should be the leadership of our caucus who is responsible to our caucus, and not to a committee.”

Harkin said committee chairmen would be too worried about protecting the parochial interests of their committee to represent the broader concerns of the Democratic Caucus. 

He said Senate Democratic Whip Dick DurbinRichard (Dick) Joseph DurbinDemocrats turn on Al Franken Minnesota's largest newspaper calls on Franken to resign Democratic senator predicts Franken will resign Thursday MORE (Ill.), Democratic Policy Committee Chairman Charles SchumerCharles (Chuck) Ellis SchumerAmerica isn't ready to let Sessions off his leash Schumer celebrates New York Giants firing head coach: ‘About time’ GOP should reject the left's pessimism and the deficit trigger MORE (N.Y.) and Democratic Conference Secretary Patty MurrayPatricia (Patty) Lynn MurrayDemocrats turn on Al Franken VA slashes program that helps homeless veterans obtain housing: report The Hill's 12:30 Report MORE (Wash.) should sit on the panel. 

Baucus declined to say whether he wanted to sit on the panel. 

“All truth is good to know, but not all truth is good to say,” he added, quoting an African proverb. 

More junior Democrats want Reid to appoint lawmakers who are likely to strike a broad compromise, such as the members of the Senate’s Gang of Six. 

“I’d like to see people on both sides who are looking for a solution,” said Sen. Michael BennetMichael Farrand BennetAvalanche of Democratic senators say Franken should resign GOP and Dems bitterly divided by immigration Schumer downplays shutdown chances over DACA fight MORE (D-Colo.). 

Sen. Tom UdallThomas (Tom) Stewart UdallAvalanche of Democratic senators say Franken should resign Dem senator slams Trump's 'moral authority' after 'Pocahontas' remark Overnight Cybersecurity: Kushner was contacted about WikiLeaks before election | Tech experts blast Trump's 'extreme vetting' plan | Senate passes defense bill with measure to modernize feds' IT MORE (D-N.M.) said, “I’d like to see some new faces so we can break the gridlock.”

Senate insiders suspect that McConnell will not appoint Sen. Orrin HatchOrrin Grant HatchMcConnell names Senate GOP tax conferees Ryan pledges 'entitlement reform' in 2018 Utah governor calls Bannon a 'bigot' after attacks on Romney MORE, ranking Republican on the Senate Finance Committee, who is facing a Tea Party challenge in Utah’s Republican primary next year. 

Hatch has already taken a strong stance against eliminating corporate tax breaks, arguing it would be harmful when the economy is still weak. 

Hatch said he could take or leave the assignment, predicting that he would have an important role in the debate because of his position on Finance. 

“That’s up to the leader,” he said. “I can live with it or I can live without it.” 

Sen. Mark WarnerMark Robert WarnerSenate panel moves forward with bill to roll back Dodd-Frank Comey back in the spotlight after Flynn makes a deal Warner: Every week another shoe drops in Russia investigation MORE (D-Va.), who helped found the Gang of Six, said he would like to serve on the panel but doubts Reid will appoint him. 

“I don’t expect to be,” he said. 

“All the leaders are going to be under enormous pressure to put folks on that will operate under certain parameters,” Warner said, hinting at pressure from labor unions and liberal groups to appoint members who will staunchly oppose entitlement cuts.

—Josiah Ryan contributed to this report.

This story was posted at 12:18 p.m. and has been updated.