The Senate on Tuesday approved an agreement to raise the debt limit by at least $2.1 trillion just hours before the administration warned it would begin defaulting on its obligations.

The legislation passed easily by a vote of 74 to 26. Forty-eight Democrats joined 28 Republicans and one Independent to send the measure to President Obama, who signed it into law about an hour later.

Obama hailed the deal as "an important first step to ensuring that as a nation we live within our means" that "also allows us to keep making key investments in thinks like education and research that lead to new jobs."

He also criticized Republicans for turning the debt-limit increase, what has traditionally been a perfunctory duty of Congress, into a political crisis.

"The uncertainty surrounding the raising of the debt ceiling for both businesses and consumers has been unsettling," Obama said. "It was something we could have avoided entirely."   

Only six Democrats voted no, even though many Democrats saw the bill as a big concession to Republicans because it does not raise any tax revenues while cutting spending by more than $2 trillion.

Passage of the deal immediately set off speculation about who might serve on a special committee created in the package to find an additional $1.5 trillion in budget savings. The Senate majority leader, the Senate Republican leader, the House Speaker and the House Democratic leader will each appoint 3 members to the panel.

Senate Republican leader Mitch McConnell (Ky.) declared the bill a victory even though many members of his conference opposed it.

"Now this bill does not solve the problem but it at least forces Washington to admit that it has one," McConnell said on the floor. "And it puts us on a path to recovery. We're nowhere near where we need to be in terms of restoring balance but there should be absolutely no doubt about this: we have changed the debate, we're headed in the right direction."

Nineteen Republicans voted against the bill. Many of them say it did not go far enough to reducing the deficit, arguing it would actually add $7 trillion to the debt over the next decade.

"This debt deal puts America at risk and does nothing to solve our spending crisis," said Sen. Jim DeMint (R-S.C.), a founding member of the Senate's Tea Party Caucus. "We haven't changed direction in Washington. We're just tapping the brakes as we speed toward a fiscal cliff."

"This bill doesn't stop deficit spending; it locks in trillion-dollar spending deficits for years to come," he added.

While the chamber's most conservative Republicans sided with DeMint, a majority took McConnell's view.

"This legislation is the best we can do right now, and it begins the process of changing Washington's spending behavior," said Sen. Roy Blunt (R-Mo.). "We need to use it as a first step to ensure that we continue to rein in federal spending and focus on policies that help spur private sector job creation."

Liberals panned the deal for cutting deeply into programs supporting low-income families at a time of nationwide economic hardship.

"It is very clear that there will be devastating cuts to education, infrastructure, Head Start and child care, LIHEAP, community health centers, environmental protection, affordable housing and many, many other programs," said Sen. Bernie Sanders (Vt.), an Independent who caucuses with Democrats.

But most Democrats said there was no other alternative to avoid missing the Aug. 2 deadline to raise the debt limit and risk a national default.

Sen. Dianne Feinstein (D-Calif.) summed up the resignation many Democrats felt voting for the agreement.

"It's a compromise and it's hard, it's a very hard compromise for people, but we recognize, I think a majority of us, that the alternative is calamitous and the alternative can very well push a real recession," said Feinstein. "I think this becomes a settlement of necessity rather than a settlement of favor."

"This agreement is the only way to avoid a first-ever government default," said Sen. Bill Nelson (D-Fla.), who faces a tough reelection race next year.

Senate Majority Leader Harry Reid (D-Nev.) seemed relieved that weeks of grueling negotiations and partisan posturing had come to an end.

He said he had gotten to know McConnell and House Speaker John Boehner (R-Ohio) "a lot better" over the past two months, and that leaders would have reached a deal much earlier if not for pressure from Tea Party-affiliated lawmakers. The majority leader called the "Tea-Party direction of this Congress" over the last few months "very, very disconcerting."

Reid acknowledged the deal was unfair in the eyes of many Democrats and Independents because it did not raise taxes on the wealthy or close special corporate tax breaks. But he said it was an important achievement, nevertheless, because it "will provide our economy with stability it desperately needs."

The legislation locks in $917 billion in cuts over 10 years in exchange for a $900 billion increase in the debt ceiling that would take place in two steps. The first $400 billion increase will happen immediately, while a second boost of $500 billion will take place in the fall and be subject to a congressional resolution of disapproval, which Obama is certain to veto.

The bill sets up a 12-member bicameral committee to recommend another $1.5 trillion in deficit reduction. If Congress passes these cuts, the president would be authorized to request another $1.5 trillion increase in the debt ceiling.

If the committee deadlocks or Congress fails to act on its recommendations, it would automatically trigger $1.2 trillion in spending cuts divided evenly between defense and non-defense programs. This would authorize the president to request a $1.2 trillion - instead of $1.5 trillion - increase in borrowing authority.

If Congress were to pass a deficit-reduction bill worth less than $1.2 trillion, the automatic cuts would make up the difference.   

Sen. Warner wants to be on debt deal's new bicameral 'super committee'  

Sen. Mark Warner (D-Va.) would "love" to serve on the new, bicameral committee established by the debt-limit deal passed Tuesday by the Senate.

"My fear is that this could be made of a group that could be the more ideologically rigid in both parties, and I'm not sure that gets us to where we need to be," Warner said in a conference call Monday, according to The Richmond Times-Dispatch.

"The deal that we're presented with isn't comprehensive, it's not bipartisan in the sense that it takes on both parties' sacred cows," he said.

The debt-limit agreement, now passed by both the House and Senate, establishes a bicameral committee of 12 legislators charged with putting together an additional $1.5 trillion deficit-reduction package.

Warner said Tuesday on Fox News Channel that the new committee needs to address the two major components missing from the debt-limit deal: entitlements and tax reforms.

"The fact that I'm willing to do that probably means that I'm not actually going to get on the committee," he said. "Chances are that there will be enormous pressure on leadership in both parties to put members that might not be willing to be as bold."

However, Warner said, he wants to be on the committee because he has been "working on this issue for the last year" as a member of the so-called Gang of Six group of bipartisan senators who proposed a deficit-reduction plan last month.

Warner said on Fox that the chances of committee gridlock were pretty high, due to the planned split between six Democrats and six Republicans.

"We need folks that can actually check their Democrat and Republican hats for a little while," he said. "Whoever is on this committee needs to make sure that they hear from voices that say we need to be really serious."

The committee's deficit-reduction package will accompany the deal's nearly $1 trillion in deficit cuts over 10 years and a $2.1 trillion raise in the debt limit that should last through 2012.