Senate Passes, Obama Signs Debt Ceiling Bill

The Senate voted Tuesday to raise the government’s debt ceiling and cut trillions of dollars from its spending, finally ending a fractious partisan battle just hours before the government’s borrowing authority was set to run out.

The bill, which passed 74 to 26 after a short debate devoid of the oratorical passion that had echoed through both chambers of Congress for weeks, was signed by President Obama later on Tuesday.

A few minutes after the vote, President Obama excoriated his Republican opposition for what he called a manufactured crisis that could have been avoided. “Voters may have chosen divided government,” he said, “but they sure didn’t vote for dysfunctional government.”

The compromise, which the House passed on Monday, has been decried by Democrats as being tilted too heavily toward the priorities of Republicans, mainly because it does not raise any new taxes as it reduces budget deficits by at least $2.1 trillion in the next 10 years. But it attracted many of their votes, if only because the many months of standoff had brought the country perilously close to default. And rather than soothing already nervous markets, the final passage sent stocks lower.

The wrangling also laid bare divisions within both parties, in the House where scores of the most conservative Republicans and most liberal Democrats refused to vote for the bill, and again in the Senate where senators such as Kelly Ayotte of New Hampshire and Mike Lee of Utah, both Republican freshmen blessed by the Tea Party, also voted against it. The last to vote was Senator Olympia J. Snowe of Maine, who conferred for several minutes with Senator Jon Kyl of Arizona, her face twisted in a grimace, then voted yes, as he had done. Ms. Snowe, a moderate Republican who faces re-election next year, is already a target of Tea Party activists in her state.

In a chamber where a Democratic majority was essentially bending to the will of a Republican minority, and where 60 votes were needed under the rules, 28 Republicans voted against the bill but only 6 Democrats voted against it. (One independent went each way.) In contrast, in the House, mostly the Republicans voted yes and about half the Democrats voted no.

Senator Mitch McConnell of Kentucky, the minority leader, who played a central role in the ultimate compromise, said his party’s goal was “to get as much spending cuts as we could from a government we didn’t control.”

“It may have been messy,” he said. “It may have appeared to some that their government wasn’t working, but in fact the opposite was true.” Legislating, he added, “was never meant to be pretty.”

He and Senator Harry Reid of Nevada, the majority leader, had a gentle toe-to-toe as the debate ended, praising each other’s performance while denouncing each other on the substance.

“It’s never, ever personal,” Mr. McConnell said.

Mr. Reid presaged the next battle, when an appointed Congressional committee is to seek new ways to cut the deficit, by rejecting the assertions of his Republican colleagues that the next phase would again exclude revenue increases, which the Democrats failed to include in the first round. “That’s not going to happen,” Mr. Reid said.

Mr. Obama, too, called for the ultimate solution to include new revenues, including raising taxes on the wealthiest Americans and closing corporate loopholes, saying that he would fight for that approach as the Congressional commission considers what to recommend to Congress for an up-or-down vote before the end of the year, as the new law requires.

Enactment of the legislation signals a pronounced shift in fiscal policy, from the heavy spending on economic stimulus and warfare of the past few years to a regime of steep spending cuts aimed at reducing the deficits — so far, without new revenues sought by the White House.

“Make no mistake, this is a change in behavior from spend, spend, spend to cut, cut, cut,” said Senator Lamar Alexander, Republican of Tennessee, as the debate began on the Senate floor.

But the fight, which is only half over until a second round of deficit reduction is completed over the next five or six months, also exposed deep ideological schisms between and within the political parties, and tarnished the images of Congress and the president alike.

And the fight left many lawmakers on both sides deeply uneasy — including Senator Richard J. Durbin, Democrat of Illinois and the assistant majority leader, who said he had consulted with the Senate chaplain over his vote, because “from where I stand it is not the clearest moral choice.” Liberal critics say the plan will hurt an already limping economy.

Despite the tension and uncertainty that has surrounded efforts to raise the debt ceiling, the House vote of 269 to 161 was relatively strong in support of the plan. Scores of Democrats initially held back from voting, to force Republicans to register their positions first. Then, as the time for voting wound down, Representative Gabrielle Giffords, Democrat of Arizona, returned to the floor for the first time since being shot in January and voted for the bill to jubilant applause and embraces from her colleagues. It provided an unexpected, unifying ending to a fierce standoff in the House.

Although the actual spending cuts in the next year or two would be relatively modest in the context of a $3.7 trillion federal budget, they would represent the beginning of a new era of restraint at a time when unemployment remains above 9 percent, growth is slowing and there are few good policy options for giving the economy a stimulative kick.

Republicans and Democrats alike made clear they were not happy with the agreement, which was struck late Sunday between the leadership of Congress and Mr. Obama.

Despite such misgivings, members of both parties welcomed the end of the debt-limit clash after months of intrigue, partisan rancor and stop-and-go negotiations that ultimately left Congress voting just hours before a deadline to avoid default.

“On to the next fight,” said Senator John Cornyn, Republican of Texas.