Congressional leaders reach deal to avert debt ceiling crisis

Congressional leaders on Tuesday announced a deal that would avert a default of the nation's credit by allowing Democrats to raise the debt ceiling in the Senate without any Republican support.

The U.S. is just days away from economic disaster, with the Treasury estimating the government will run out of money on Dec. 15, leaving the country unable to pay its bills.

Real-world consequences of the U.S. defaulting could include delays to Social Security payments and checks to service members, a suspension of veterans' benefits and rising interest rates on credit cards, car loans and mortgages.

The House approved the measure along party lines in a late-night 222-212 vote on Tuesday.

The legislation sets up a procedure that would allow the Senate to pass the final bill to raise the debt limit with a simple majority by suspending filibuster rules for a debt ceiling increase by a month.

Under this process, 10 Republican senators will still need to support the legislation setting up the agreement.

Senate Minority Leader Mitch McConnell seemed confident Tuesday that he had the votes locked in.

"I think this is in the best interest of the country to avoid default," McConnell told reporters Tuesday during a news conference.

"The red line is intact. The red line is that you have simple majority party line vote on the debt ceiling. That's exactly where we'll end up," he said.

McConnell and Senate Majority Leader Chuck Schumer spent weeks huddling behind closed doors to strike an agreement. The deal comes months after bitter partisan bickering over the matter, after Republicans insisted on Democrats raising the debt limit without any GOP support.

"We Democrats were always willing to carry the burden. That's what's going to happen," Schumer said Tuesday.

"Our number one goal to get this done -- get it done with just Democratic votes, without a convoluted, risky process -- is what we're on the verge of achieving," Schumer said.

The language regarding the debt ceiling process is attached to a separate provision that will avert impending Medicare cuts, which are set to take effect early next year.

"Once the Senate has passed the legislation lifting the debt limit, the House will take up that bill and send it to the President," House Speaker Nancy Pelosi announced in a letter addressed to colleagues Tuesday.

"Let us remember that addressing the debt limit is not about future spending. This is about meeting obligations that the government has already incurred, largely during the Trump Administration. Only three percent of the current debt has been accrued under President Biden," she said in the letter.

ABC News' Trish Turner contributed reporting.