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 ReidGOP eager to see Harry Reid go Democratic efforts to cling to power at FCC are doomed to fail Lawmakers haggle over funding bill as shutdown nears MORE (D-Nev.), who introduced it during debt-limit negotiations with Senate Republican leader Mitch McConnellMitch McConnellGOP eager to see Harry Reid go Overnight Healthcare: Hospitals plot attack against ObamaCare repeal Republicans tie Trump's Defense pick to funding fight MORE (Ky.) and House Speaker John BoehnerJohn BoehnerRyan delays committee assignments until 2017 Lobbying World 'Ready for Michelle' PACs urge 2020 run MORE (R-Ohio). 

Reid, McConnell, BoehnerJohn BoehnerRyan delays committee assignments until 2017 Lobbying World 'Ready for Michelle' PACs urge 2020 run 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 BaucusThe mysterious sealed opioid report fuels speculation Lobbying World Even Steven: How would a 50-50 Senate operate? 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 HarkinGrassley challenger no stranger to defying odds Clinton ally stands between Sanders and chairmanship dream Do candidates care about our health or just how much it costs? 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 DurbinDick DurbinGOP eager to see Harry Reid go Republicans tie Trump's Defense pick to funding fight Lawmakers haggle over funding bill as shutdown nears MORE (Ill.), Democratic Policy Committee Chairman Charles SchumerCharles SchumerDems press Trump to support ‘Buy America’ provision in water bill Overnight Finance: Trump takes victory lap at Carrier plant | House passes 'too big to fail' revamp | Trump econ team takes shape Anti-Defamation League: Ellison's past remarks about Israel 'disqualifying' MORE (N.Y.) and Democratic Conference Secretary Patty MurrayPatty MurrayTop Dem signals likely opposition to Sessions nomination Overnight Finance: Trump takes victory lap at Carrier plant | House passes 'too big to fail' revamp | Trump econ team takes shape Senate Dems: Force Cabinet nominees to release tax returns 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 BennetSenate passes college anti-Semitism bill Speculation and starting points: accreditation, a new administration and a new Congress The untold stories of the 2016 battle for the Senate MORE (D-Colo.). 

Sen. Tom UdallTom UdallTom Udall eyes NM governor bid Court ruling could be game changer for Dems in Nevada Tensions rise over judicial nominees 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 HatchChairman: Trump can play ‘key role’ in tax reform push The Hill's 12:30 Report Senate GOP: National museum should include Clarence Thomas 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 WarnerTop Intel Dem: Congress 'far from consensus' on encryption Overnight Cybersecurity: Watchdog seeks release of Clinton aide's deposition Overnight Tech: FCC eyes cybersecurity role | More trouble for spectrum auction | Google seeks 'conservative outreach' director 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.