WASHINGTON -- The Senate did its part Tuesday to end a months-long standoff and raise the debt ceiling, passing a bill that dramatically cuts spending and creates a new "super committee" that will slash budgets even more.
The Senate approved the measure 74 to 26. The bill will go to President Obama's desk with little time to spare; Treasury Secretary Timothy Geithner has said that the country would begin to default on its obligations at midnight if a bill was not passed by then.
Although Democrats had many complaints about the bill, they supported it overwhelmingly, with 45 voting "yes" and six voting "no." Twenty-eight Republicans voted in favor of the bill, meanwhile, while 19 voted against it. The Senate's two Independents, Sens. Joe Lieberman (Conn.) and Bernie Sanders (Vt.) voted "yes" and "no," respectively.
The bill allows the president to increase the borrowing limit by $400 billion immediately and mandates $917 billion in cuts over the next decade. Obama can hike the limit another $500 billion later, and only be blocked if Congress actively votes to disapprove.
It also sets up a select committee of 12 lawmakers that will look for a way to cut another $1.5 trillion from the deficit over the next decade. And the rest of Congress will have very little to say about how those cuts are made.
The super committee will have to make its recommendations before Thanksgiving. Once it does, the other members of Congress won't be able to make modifications; they will only be able to vote the cuts up or down.
The bill "puts in place a powerful committee that will ensure further much-needed reform," said Senate Minority Leader Mitch McConnell (R-Ky.)
Congress must pass or fail the committee's package by Dec. 23. Even the rules of the committee will supersede the normal rules of either chamber.
If the committee somehow fails to agree on cuts, the debt bill also includes triggers to cut $1.2 trillion, divided between domestic spending and the military. That too, ties Congress' hands.
"The trigger that kicks in is very, very difficult," said Senate Majority Leader Harry Reid (D-Nev.), saying that it was put in place to ensure that some form of revenue is added to the committee's debt-cutting plan.
"There must be a sharing of sacrifice," Reid said. "It's very unfair for millionaires and billionaires not to be contributing."
Economists have said the bill is helpful in that it provides stability and predictability, but noted that all spending cuts will likely slow the economy. In addition, the bill does not include the extension of federal unemployment benefits and allows the 2% payroll tax break workers have been enjoying to expire.
JP Morgan estimated that the drag could cut GDP growth by 1.5 percentage points.
"The federal government spends huge amounts of money, and to the extent, in the short-term, that it's not spending that amount of money, there will be an impact to the economy," said Ernie Patrikis, a banking partner at White & Case and former vice president of the New York Federal Reserve. He said that while he thought the stability would encourage more investment, "the impact on unemployment is not terribly helpful."
"It's definitely a drag -- the only question is how much," said Dean Baker, co-director of the Center for Economic and Policy Research. "We're going backward when we desperately need to go forward."
Overall, very few lawmakers had many good things to say about the bill other than it had staved off disaster.
"This compromise that we reached is not perfect," said Reid. "We settled for less than we wanted, but so did my friend [McConnell]."
He also complained that the country was forced to such an impasse because of the "very, very disconcerting" impact of the Tea Party.
He said the intransigence on raising any taxes ignores the reality that tax cuts alone have not been a solution, since the country has had historically low rates since the Bush administration.
"If the tax cuts were so good, the economy should be thriving," he said.
McConnell was more satisfied with the outcome.
"It was a debate that Washington very much needed to have," he said. "The American people agree with us on the nature of the problem ... if you're spending yourself into oblivion, the solution isn't to spend more, it's to spend less."
"The bill doesn't solve the problem, but it forces us to admit we have one," McConnell added.
Discontent was higher among his colleagues. Some Tea Party-backed Republicans had opposed a debt ceiling hike altogether, while others in the GOP feared that the trigger that slashes defense spending was a threat to national security. "To me it comes close to violating our oath of office," said Sen. Jon Kyl (R-Ariz.).
Still, the bitterness seems strongest on the Democratic side, after the party began the process insisting that a bill to raise the debt ceiling, long a routine procedure, should be "clean" and not tied to spending cuts. They gave ground continually for months, and McConnell happily pointed out that the White House once labeled any linkage to future spending "insane."
Now the question shifts to which lawmakers will make up the super committee, and how it will proceed.