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House passes procedural bill to raise debt ceiling

Yahoo Finance's Jessica Smith details the latest news on the debt ceiling bill being negotiated in Congress, as it has just been voted through the House and heads into the Senate.

Video transcript

[MUSIC PLAYING]

- Welcome back to Yahoo Finance Live. The United States government is, again, trying to avoid hitting the debt ceiling, which could trigger a default on the US treasuries that it issues around the world. And if that sounds familiar to you, that's because we had this conversation back in October. Congress kicked the can down the road a few weeks. We're having this conversation again, ahead of a December 15 date that the Treasury says is going to be critical for the government to meet its obligations. For more on this, let's bring in Yahoo Finance's Jessica Smith with the latest in DC. And Jess, the latest update appears to be that the House has approved something. What does the timeline look like for the Senate to get ahead of this before that December 15th critical date?

JESSICA SMITH: Yeah, Brian. Well, the House voted last night to create a process, a fast track process, for passing a debt ceiling increase in the Senate with just a majority vote. They folded this into a bill to avoid cuts to Medicare, to make it a little easier for lawmakers to get behind. The bill does now head to the Senate, where it will need 60 votes to pass.

This is a very unusual process. It's the result of negotiations between Senate Leader Schumer and McConnell. McConnell, you'll remember, had said during this debate a few months ago that Republicans would not help Democrats raise the debt ceiling again. He said that Democrats should do it on their own through reconciliation, but they came up with this agreement that would create a new process, allowing Democrats to raise the debt limit by a specific amount.

We're hearing around $2 trillion, one time, sometime before mid January. Now, they would need 60 votes in the Senate to establish this process, so 10 Republicans have to vote for it. McConnell says that he is optimistic he can rally that support, though some Republicans are opposed to this. The Senate is set to start consideration on this tomorrow. And then, after the bill, laying the groundwork establishing this process is signed into law.

Then, both chambers would need to actually vote to raise the debt limit. They'll only need 51 votes to do this, and the increase is expected to last until after the midterms next year. So trying to make sense of why they're going about this kind of complicated maneuver. First, it avoids a default. And then, Republicans get a win because Democrats have to raise the debt limit by a specific amount instead of just a length of time, and Republicans don't actually have to cast a vote to raise the debt limit.

Democrats get a win, because they don't have to do it through the reconciliation process, which they have wanted to avoid. And then, both parties would probably like to avoid having this argument until after the midterms. So again, the House passed the bill last night, the Senate is set to start consideration on Thursday, and then after that signed into law, they'll actually vote on the debt limit itself, guys.

- Yeah, Jessica. another reminder for all of our viewers that it has nothing to do with the spending that's already been authorized, merely the Treasury's ability to issue new debt to pay off the bills that it's already accumulated. But I guess, we'll have to have this conversation again sometime next year. Yahoo Finance's Jess Smith, thanks so much.

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