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 Mason ReidTo end sugar subsidies, conservatives can't launch a frontal attack House presses Senate GOP on filibuster reform A pro-science approach to Yucca Mountain appropriations MORE (D-Nev.), who introduced it during debt-limit negotiations with Senate Republican leader Mitch McConnellAddison (Mitch) Mitchell McConnellDems confront Kelly after he calls some immigrants 'lazy' McConnell: 'Whoever gets to 60 wins' on immigration Overnight Defense: Latest on spending fight - House passes stopgap with defense money while Senate nears two-year budget deal | Pentagon planning military parade for Trump | Afghan war will cost B in 2018 MORE (Ky.) and House Speaker John BoehnerJohn Andrew BoehnerLobbying World Freedom Caucus wants budget reforms attached to debt limit increase Trey Gowdy announces retirement from Congress MORE (R-Ohio). 

Reid, McConnell, BoehnerJohn Andrew BoehnerLobbying World Freedom Caucus wants budget reforms attached to debt limit increase Trey Gowdy announces retirement from Congress 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 Baucus2020 Dems pose a big dilemma for Schumer Steady American leadership is key to success with China and Korea Orrin Hatch, ‘a tough old bird,’ got a lot done in the Senate 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 HarkinThomas (Tom) Richard HarkinOrrin Hatch, ‘a tough old bird,’ got a lot done in the Senate Democrats are all talk when it comes to DC statehood The Hill's 12:30 Report 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 DurbinDems confront Kelly after he calls some immigrants 'lazy' McConnell: 'Whoever gets to 60 wins' on immigration Hoyer: DACA deal a long ways off MORE (Ill.), Democratic Policy Committee Chairman Charles SchumerCharles (Chuck) Ellis SchumerGOP lawmaker: Dems not standing for Trump is 'un-American' Trump called for unity — he didn’t even last a week Overnight Defense: GOP plays hardball by attaching defense funding to CR | US reportedly drawing down in Iraq | Russia, US meet arms treaty deadline | Why the military wants 6B from Congress MORE (N.Y.) and Democratic Conference Secretary Patty MurrayPatricia (Patty) Lynn MurrayLawmakers eye retirement help for gig economy workers Overnight Regulation: Labor Department reportedly hid unfavorable report on tip-pooling rule | NY plans to sue EPA over water rule | Senators urge FTC to probe company selling fake Twitter followers Trump's vows to take on drug prices, opioids draw skepticism 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 BennetGOP Senate candidate fundraising lags behind Dems in key races Dem shutdown strategy: Force McConnell to deal DACA is neither bipartisan nor in America's interest MORE (D-Colo.). 

Sen. Tom UdallThomas (Tom) Stewart UdallWHIP LIST: Shutdown looms as Senate lacks votes to pass House spending bill Dems harden line on stopgap measure Overnight Finance: Shutdown drama grips Capitol | White House backs short-term spending bill | Mulvaney begins consumer bureau shake-up 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 HatchOvernight Tech: Uber exec says 'no justification' for covering up hack | Apple considers battery rebates | Regulators talk bitcoin | SpaceX launches world's most powerful rocket Overnight Cybersecurity: Tillerson proposes new cyber bureau at State | Senate bill would clarify cross-border data rules | Uber exec says 'no justification' for covering up breach Hatch introduces bipartisan bill to clarify cross-border data policies 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 WarnerRegulators push for 'coordinated' approach to bitcoin trading House funding bill includes bipartisan Medicare reforms Overnight Tech: Mulvaney reportedly froze Equifax hack probe | Dems want new restrictions on Comcast-NBC | NJ gov signs net neutrality order | Senate confirms patent chief 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.