In surprise, Senate quickly passes debt ceiling increase

In a surprise development, the Senate Tuesday voted 68-29 to approve a clean $450 billion debt limit increase, forgoing any chance to add a fiscal 2003 spending cap to the legislation as some senators had hoped, but pressuring House Republicans to move a clean bill of their own.

The debt limit bill was not supposed to come up for a floor vote until later this week, but Senate Majority Leader Tom Daschle, D-S.D., and Minority Leader Trent Lott, R-Miss., agreed late Monday night to move a clean bill quickly through the chamber, knowing they had enough Democratic and Republican votes for passage.

The White House has said it needs a debt limit increase by the end of June to keep the government solvent. Earlier this year, the Treasury Department twice suspended daily investments of billions of dollars of federal employees' retirement funds to avoid breaking the debt ceiling.

Until Monday night, Senate Budget Committee Chairman Kent Conrad, D-N.D., had objected to moving a clean debt limit increase through the Senate because he wanted to attach a 2003 spending cap and budget enforcement mechanisms agreed to last week with Budget ranking member Pete Domenici, R-N.M.

But Conrad told reporters Daschle called him and asked if he would agree to let the bill come up for a vote, assuring him that he would allow Conrad to address the budget problem on separate legislation.

"We need a budget and a continuation of budget disciplines, and the leader is in agreement," said Conrad, who still voted against the debt limit increase because he said it was too high.

What happens now to the debt limit and budget enforcement issue is very much up in the air, and their fates appear inextricably linked at this point, along with the fiscal 2002 supplemental spending bill, which is now in conference.

"It's a very complicated situation," Conrad noted. On the debt limit issue, Democrats are hoping the vote today in the Senate would pressure the House to take a separate vote on the issue. "Now [Democrats] can argue, `We voted for it, you vote for it, too,' " one Senate GOP source said.

Previously, the House put placeholder language in the 2002 supplemental bill to allow conferees to agree to some sort of debt limit increase--a vote derided by Democrats because it allowed Republicans to avoid an up-or-down vote on raising the debt ceiling.

Indications Tuesday were that House Republicans still wanted to avoid the vote and keep a debt limit increase within the confines of the supplemental conference.

House Majority Leader Dick Armey, R-Texas, said the Senate's vote was a positive sign, but saw no advantage to moving a separate debt limit bill. "There is a connection between the debt limit and the emergency supplemental. You can't really spend that money until the debt limit is resolved," Armey said.

But Senate sources suggested it was unlikely that Democrats would allow the debt limit increase to be part of the supplemental--unless House leaders agreed to add a 2003 spending cap to the supplemental that is more to the Senate's liking.

The budget deal Conrad and Domenici worked out last week would have set the spending target at $768 billion, which is about $19 billion greater than the House number. But adding the budget deal to the supplemental could create parliamentary hurdles in the Senate, and in such a case, Conrad said he would like to see some sort of budget deal materialize on either the defense authorization bill or the first 2003 appropriations bill to move through Congress.