The U.S. House of Representatives, which is divided along party lines, approved a bill on Wednesday to temporarily suspend the $31.4 trillion debt ceiling.
Despite opposition from conservative Republicans, the bill received majority support from both Democrats and Republicans, aiming to prevent a catastrophic default.
With a vote of 314-117 in the Republican-controlled House, the legislation will now move to the Senate for approval.
The Senate must pass the bill and send it to President Joe Biden before the looming Monday deadline, which marks the expected depletion of funds for the federal government to meet its financial obligations.
President Biden expressed his satisfaction with the agreement, stating that it is beneficial for the American people and the economy. He urged the Senate to pass the bill promptly so that he could sign it into law.
The bill represents a compromise between President Biden and House Speaker Kevin McCarthy. Despite opposition from 71 conservative Republicans, the measure gained support from 165 Democrats, outnumbering the 149 Republicans who voted in favor.
This ensured the bill’s passage, despite Republicans holding a narrow 222-213 majority in the House.
The legislation will suspend the federal government’s borrowing limit until January 1, 2025, effectively removing it temporarily. This timeline allows President Biden and Congress to defer the politically contentious issue until after the November 2024 presidential election.
Additionally, the bill includes provisions to limit certain government spending over the next two years, streamline the permitting process for specific energy projects, reclaim unused COVID-19 funds, and expand work requirements for additional recipients of food aid programs.
Conservative Republicans desired more significant spending cuts and stricter reforms, expressing dissatisfaction with what they perceive as a two-year spending freeze filled with loopholes and gimmicks. Representative Chip Roy, a prominent member of the hardline House Freedom Caucus, voiced these concerns.
US Debt Ceiling Bill Receives Strong Support
Progressive Democrats, who initially opposed negotiations on the debt ceiling, have their own reasons for opposing the bill. One of the concerns revolves around the introduction of new work requirements for some federal anti-poverty programs.
Democratic Representative Jim McGovern criticized Republicans, claiming they were forcing a choice between feeding vulnerable Americans or risking default.
The non-partisan Congressional Budget Office released a statement late on Tuesday, indicating that the legislation would result in $1.5 trillion in savings over the next decade.
However, this figure falls short of the $4.8 trillion in savings targeted by Republicans in a bill they passed through the House in April. Furthermore, it is also lower than the $3 trillion deficit reduction proposed by President Biden’s budget through new taxes during the same period.
The focus now shifts to the Senate, where leaders from both parties expressed their hopes of swiftly enacting the legislation before the weekend. However, potential delays related to amendment votes could complicate matters.
Republicans indicated that Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell might need to allow votes on Republican amendments to ensure a speedy process.
However, Schumer seemed to reject the idea of amendments on Wednesday, stating that they couldn’t send anything back to the House and emphasizing the need to avoid default.
The Senate’s discussions and voting process may continue over the weekend, especially if any of the 100 senators try to impede the progress. Senator Rand Paul, known for stalling important Senate votes in the past, mentioned that he wouldn’t obstruct the bill’s passage if he could offer an amendment for a floor vote.
Republicans can claim a victory with the bill, as it redirects some funding away from the Internal Revenue Service, although the White House assures that it won’t undermine tax enforcement.
Republicans argue that substantial spending cuts are necessary to curb the growth of the national debt, which stands at approximately $31.4 trillion, roughly equivalent to the yearly economic output.
Government projections indicate that interest payments on the debt will consume an increasing portion of the budget as healthcare and retirement costs rise due to an aging population. However, this deal doesn’t address the need to rein in those rapidly growing programs.