In a closely divided vote, the US House of Representatives on Wednesday approved a bill to suspend the $31.4 trillion debt ceiling.
The legislation received support from both Democrats and Republicans, enabling it to overcome opposition from conservative factions and prevent a potentially catastrophic default. The Republican-controlled House voted 314-117 in favor of the bill, which will now go to the Senate for legislation before an upcoming Monday deadline when the federal government is expected to run out of its own funding.
President Joe Biden expressed satisfaction with the bill’s passage and urged the Senate to quickly pass it to be signed into law. The legislation, a compromise between Biden and House Speaker Kevin McCarthy, faced opposition from 71 hardline Republicans. However, with the support of 165 Democrats, it was able to overcome 149 Republican votes in favor and secure passage. The Republican Party holds a slim majority in the House with a 222-213 split.
The bill effectively suspends the federal government’s borrowing limit until January 1, 2025. That timeline allows Biden and Congress to delay addressing this politically sensitive issue until after the 2024 presidential election. Additionally, the legislation imposes spending limits over the next two years, streamlines the permitting process for certain energy projects, reallocates unused COVID-19 funds, and cuts some food assistance programs. Increases work requirements for
Hard-line Republicans expressed dissatisfaction with the compromise bill, advocating for more significant spending cuts and tougher reforms. Representative Chip Roy, a prominent member of the conservative House Freedom Caucus, criticized the legislation, calling it a two-year spending freeze full of loopholes and gimmicks.
Progressive Democrats, who initially opposed negotiating the debt ceiling, oppose the bill for several reasons, including the introduction of new work requirements for federal anti-poverty programs. Representative Jim McGovern said Republicans are forcing him to decide which vulnerable Americans should receive aid or risk being at risk, underscoring the moral dilemma they face. are
The nonpartisan Congressional Budget Office estimates the legislation would result in $1.5 trillion in savings over a decade, significantly higher than the $4.8 trillion targeted by Republicans in the bill passed in April. But less. That’s less than the $3 trillion in deficit reduction through increased taxes in Biden’s budget over the same period.
Attention now turns to the Senate, where leaders from both parties hope to speed up passage of the bill before the end of the week. However, potential delays related to amendment votes could complicate the process. Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell may need to vote on the Republican amendments to ensure quick action. Nevertheless, Schumer ruled out the possibility of amendments, stressing the importance of avoiding default.
Senate debate and voting could drag on into the weekend, especially if a senator decides to block approval. Senator Rand Paul, known for delaying key Senate votes, expressed his intention to propose an amendment to the floor vote if the bill’s progress is not impeded. Senator Bernie Sanders, a progressive independent who caucuses with Democrats, announced his opposition to the bill because of the energy pipeline and the addition of additional work requirements.
The bill includes provisions that benefit both Republicans and Biden. It retains major elements of Biden’s infrastructure and green energy legislation while imposing spending cuts and work requirements that are less severe than Republicans want. Republicans argue that substantial spending cuts are necessary to control the growth of the national debt, which is currently roughly equal to the annual economic output of the United States. However, the bill does not address rising costs for health and retirement programs, which are likely to consume a larger portion of the budget due to an aging population.
The debt ceiling standoff has prompted credit rating agencies to issue warnings about a potential downgrade in U.S. debt, which forms the backbone of the global financial system.
