The House passed a bill Tuesday that would create an elaborate procedural workaround to allow Democrats to raise the federal debt ceiling without any Republican votes, offering both parties a possible offramp from a politically and economically perilous fight.

What does the bill do?

The bill – a compromise between Senate Majority Leader Chuck Schumer, D-N.Y., and Minority Leader Mitch McConnell, R-Ky. – creates an expedited process for the Senate to raise the debt ceiling with a simple majority vote through Jan. 15. The Senate is expected to vote Thursday on the legislation, which would also avert some unrelated Medicare cuts.

Assuming it gets the 60 votes necessary to pass in the Senate, Democrats would then need to craft a standalone bill to raise the debt ceiling by a specific amount that could pass with 51 votes. According to CNN, they would likely look to increase it by at least $1 trillion to a total of $30 trillion or more.

What is the debt ceiling?

Congress has long imposed some restrictions on the debt the federal government is able to accrue, but a strict aggregate debt limit was first established in the 1930s, according to the Congressional Research Service. In 1939, that limit was $45 billion; today, it is $29 trillion.

In a recent letter to congressional leaders, Treasury Secretary Janet Yellen estimated the government would have difficulty paying its debts past Dec. 15 if lawmakers do not act. Officials warn defaulting on existing debt obligations would create an unprecedented economic crisis, threaten financial markets, and undermine confidence in the U.S. as a borrower.

“The debt limit does not authorize new spending commitments,” a Treasury Department fact sheet states. “It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.”

How did we get here?

The compromise follows months of drama on Capitol Hill as congressional leaders flirted with the first-ever default on the nation’s debt. Republicans insisted Democrats must raise the debt ceiling on their own through reconciliation, while Democrats pressed for a bipartisan vote to avoid relying on the arduous and time-consuming parliamentary process.

Over the summer, as Democrats weighed trillions in new spending, McConnell announced Senate Republicans would not provide any votes to increase the debt ceiling. Democrats refused to act unilaterally, leading to a tense standoff in October, when a handful of Republicans begrudgingly agreed to raise the debt limit by $480 billion.

At the time, McConnell demanded Democrats use the two months that agreement bought them to pursue a larger debt ceiling increase through reconciliation. They did not, and Congress again found itself on the brink of a default this week.

What did either side get out of all this?

The legislative maneuvering gives both sides something they want. Democrats will be able to avoid a debt default without resorting to reconciliation, but they will have to specify the dollar amount they want to raise the limit by, handing Republicans new ammunition for midterm attacks.

“I think this is in the best interest of the country by avoiding default. I think it is also in the best interest of Republicans,” McConnell said Tuesday, adding Democrats would still have to “own” the increase even if the GOP helps lay the procedural groundwork.

The deal is not yet set in stone, but Senate leaders are confident at least 10 Republicans will back the compromise. Although several GOP lawmakers have denounced the agreement, McConnell allies maintain it is the best way to get Democrats on the record on raising the debt without risking an economic disaster that could blow back on both parties.

“Neither side really wanted the government to default, especially during the holidays...,” said Todd Belt, director of the political management program at the George Washington University Graduate School of Political Management. “Both of them had an interest in fending off the default because neither side really knew who would take the blame for that.”

The agreement does not authorize any new spending, but it could free up the legislative calendar for Democrats to advance their Build Back Better Act before the end of the year. That bill will have to proceed through reconciliation, and they need support from all 50 Senate Democrats to pass it.

Still, Democrats had hoped to just suspend the debt ceiling for a period of time, and they will instead have to vote to increase the nation’s debt to $30 trillion or more. Attacks on Democratic incumbents over out-of-control spending were coming next fall anyway, but Belt said attaching a specific number could be more potent.

“When you can put a dollar figure on something, it gives an argument more gravitas,” he said.

Why is the debt ceiling so controversial?

Congress raised the debt ceiling dozens of times over the decades without much difficulty, but the process has grown far more contentious since the early 2000s. Lawmakers from both parties have used it as leverage to extract concessions from the White House, but past votes to pay off the nation’s debts have ultimately been bipartisan.

Democrats argue raising the debt ceiling is about paying off debts incurred by both parties, including trillions in bipartisan COVID-19 relief. However, many Republicans have tied the issue to President Biden’s future spending plans, as well, rejecting even a procedural vote to allow Democrats to easily approve an increase.

Some have sought to eliminate debt ceiling debates entirely by either raising the limit to an astronomical sum or automatically tying it to future spending levels, but it is unclear how much support those solutions have among moderate Democrats. Proponents of preserving the debt limit argue forcing Congress and the White House to take concrete, visible action to authorize additional borrowing creates a form of political accountability.

What happens now?

Some Democrats have already cited this deal as evidence leadership can carve out exceptions to filibuster rules when they consider it necessary. Pressure is likely to grow on Schumer to bypass Republicans on other issues like voting rights, but moderates within the party remain reluctant to alter long-standing rules.

“It's proof that it's possible to create exceptions to the filibuster and move forward when it's important,” Sen. Elizabeth Warren, D-Mass., said Wednesday. "Do it once, let's do it twice."

The bigger question is what all this means for future debt limit fights. Republicans are likely to control at least one chamber of Congress after the 2022 elections, and much of the party appears unwilling to support anything that could be construed as facilitating Biden’s agenda.

The last time a Democratic president faced off with an ascendant House Republican majority over the debt limit in 2011, the nation came within days of default and lost its AAA Standard & Poor’s credit rating. That battle led to the passage of the Budget Control Act, which set up automatic spending cuts that Congress struggled with for years.

“It doesn’t portend good news looking into the future, I don’t think,” Belt said of the recent partisan bickering. “It’s become politicized, and like everything else, it seems difficult to take the politics out of it.”