United States: Bill passed raising debt ceiling

The House on Wednesday night passed a bipartisan bill to suspend the debt ceiling, overcoming vocal opposition from conservative and liberal lawmakers and bringing the country one step closer to avoiding an economy-rattling default ahead of next week’s deadline.

The legislation — which was crafted through negotiations between President Biden, Speaker Kevin McCarthy and their designees — cleared the chamber in a bipartisan 314-117 vote and now heads to the Senate, where leaders are hoping for swift consideration as the default deadline looms.

Treasury Secretary Janet Yellen has warned that the US could run out of cash to pay its bills by June 5, 2023, a situation that would plunge the country into its first-ever default — which economists and administration officials have warned would be catastrophic for the economy.

The bill suspends the debt limit through January 01, 2025, while also implementing a slew of cost-cutting measures including new spending caps over the next two years and a clawback of billions of dollars of unspent COVID-19 funds. It also includes permitting reform, puts an end date on Biden’s pause on student loan repayments and beefs up work requirements for federal assistance programs.

Wednesday’s vote marked a victory for McCarthy, who led his conference in passing a sweeping debt limit bill in April, got Biden to the negotiating table after the president for months insisted on a clean debt ceiling increase, and succeeded in narrowing those talks to just him, the president and their appointed deputies. McCarthy’s deputies then extracted concessions from the White House refused proposals like increasing taxes and worked furiously to sell the ultimate agreement to his conference.

“Passing the Fiscal Responsibility Act is a crucial first step for putting America back on track,” McCarthy said on the House floor Wednesday. “It does what is responsible for our children, what is possible in divided government, and what is required by our principles and promises.”

“Yes, it may not include everything we need to do,” he continued, “but it is absolutely what we need to do right now.”

But the deal simultaneously heightened the chances that McCarthy — who fought for his Speakership over 15 ballots in January — could face a challenge to his gavel from disgruntled conservatives who felt betrayed by the agreement he struck with the White House.

The vote also notched a win for Biden, who achieved the Democrats’ goal of punting any future debt limit increase beyond the 2024 presidential election.

Both camps, however, saw their fair share of opposition.

Seventy-one Republicans and 46 Democrats voted against the bill in the House — mostly liberals and conservatives protesting specific provisions of the bill. Their numbers, however, were never a threat to the bill’s passage because of a hodgepodge of moderates and leadership allies who — despite some acknowledging the bill wasn’t exactly what they wanted — threw their support behind the measure.

Conservatives, generally speaking, were frustrated with the lackluster magnitude of spending cuts in the agreement and the absence of several provisions that were in the debt limit bill — titled the Limit, Save, Grow Act — that House Republicans passed in April. 

The Congressional Budget Office (CBO) Tuesday estimated that the bipartisan debt limit deal could reduce projected deficits by about US$1.5 trillion over the next decade, a meager assessment compared to the roughly US$4.8 trillion the nonpartisan scorekeeper said the GOP bill would save.

Ahead of the high-stakes vote, more than 30 Republicans went on the record saying they would not vote for the bill, with some encouraging their GOP colleagues to join them in opposition.

“I want to be very clear: Not one Republican should vote for this deal. Not one,” Rep. Chip Roy said during a press conference Tuesday. “If you’re out there watching this, every one of my colleagues, I’m gonna be very clear: Not one Republican should vote for this deal.”

“It is a bad deal,” he added.

Liberals, on the other hand, voiced concern with the size and scope of spending cuts in the bill, and accused Republicans of holding the US economy hostage by forcing cost-cutting provisions in conjunction with the debt limit hike.

Work requirements also emerged as a particularly controversial topic throughout negotiations — which McCarthy dubbed a red line and House Minority Leader Hakeem Jeffries called a nonstarter. 

The legislation implements new work requirements for recipients of the Supplemental Nutrition Assistance Program — formerly known as food stamps — who are aged 50 to 54 and do not have dependents, and it includes some additional work requirements for the Temporary Assistance for Needy Families (TANF) program.

The bill does, however, include food stamp work requirement exemptions for individuals experiencing homelessness, veterans, and those 24 years or younger who were in foster care when they turned 18.

The CBO estimated that the work requirement changes would actually increase spending by US$2.1 billion over the next 10 years.

The bill came to the floor for a final vote on Wednesday after a drama-filled procedural vote that drove Democrats to trigger an emergency effort to help Republicans advance the bill.

While votes on rules, which govern debate over legislation, typically break along party lines, 29 Republicans broke from the GOP and opposed the rule on Wednesday as a way to boycott the debt limit bill. Shortly before the vote closed — as the bill was poised to be blocked — 52 Democrats threw their support behind the rule, bringing the final vote to 241-187 and allowing the debt limit bill to advance to the floor for a full vote.

“From the very beginning, House Democrats were clear that we would not allow extreme MAGA Republicans to default on our debt, crash the economy or trigger a job-killing recession. Under the leadership of President Joe Biden, Democrats kept our promise. And we will continue to do what is necessary to put people over politics,” Jeffries said on the House floor Wednesday.

He noted the last-minute scrambling on the debt limit bill.

“The question that remains right now is what will the House Republican majority do? It appears that you may have lost control of the floor of the House of Representatives. Earlier today 29 house republicans voted to default on our nation’s debt and against an agreement that you negotiated,” Jeffries said. “It’s an extraordinary act that indicates just the nature of the extremism that is out of control on the other side of the aisle.”

House passage of the Biden-McCarthy deal puts Congress closer to capping off a months-long saga over the debt ceiling, which began when the nation hit its borrowing limit on January 19, forcing the Treasury Department to begin implementing extraordinary measures so the country could continue paying its bills and stave off a default.

And it changes the political dynamics in the House GOP for McCarthy. 

McCarthy in January had made concessions and commitments on House rules and spending in order to secure the Speakership. The various factions of the conference had generally gotten along in the months since, but the right flank’s disappointment in the debt limit deal shattered that.

Rep. Dan Bishop even called for a vote to oust McCarthy as Speaker – though did not commit to making that move.

Allies of McCarthy hope that the discontent will blow over. 

“I think you’ll see that there’s still a broad cross-section of this conference that wants to try to figure out a way to do things together,” Rep. Dusty Johnson said.

McCarthy, for his part, is brushing aside the looming threat.

“Everybody has the ability to do what they want. But if you think I’m gonna wake up in the morning and be ever worried about that?” he told reporters Wednesday. “No, doesn’t bother me.”

 

 

McCarthy elected speaker of US House of Representatives

Republican Kevin McCarthy was elected speaker of the US House of Representatives early on Saturday, after making extensive concessions to a group of right-wing hardliners that raised questions about the party's ability to govern.

The 57-year-old Californian suffered one final humiliation when Representative Matt Gaetz withheld his vote on the 14th ballot as midnight approached, prompting a scuffle in which fellow Republican Mike Rogers had to be physically pulled away.

McCarthy's victory in the 15th ballot brought an end to the deepest congressional dysfunction in over 160 years. But it sharply illustrated the difficulties that he will face in leading a narrow and deeply polarized majority.

He won at last on a margin of 216-212. He was able to be elected with the votes of fewer than half the House members only because six in his own party withheld their votes - not backing McCarthy as leader, but also not voting for another contender.

“I'm glad that it's over," McCarthy told reporters shortly after the vote.

McCarthy agreed to a demand by hardliners that any lawmaker be able call for his removal at any time. That will sharply cut the power he will hold when trying to pass legislation on critical issues including funding the government, addressing the nation's looming debt ceiling and other crises that may arise.

"We got the things that are transformational," said Republican Representative Ralph Norman, who voted to back McCarthy after opposing him for much of the week.

Republicans' weaker than expected performance in November's midterm elections left them with a narrow 222-212 majority, which has given outsized power to the right-wing hardliners who have opposed McCarthy's leadership.

Those concessions, including sharp spending cuts and other curbs on McCarthy's leadership, could point to further turbulence in the months ahead, especially when Congress will need to sign off on a further increase of the United States' US$31.4 trillion borrowing authority.

Over the past decade, Republicans have repeatedly shut down much of the government and pushed the world's largest borrower to the brink of default in efforts to extract steep spending cuts, usually without success.

Several of the hardliners have questioned McCarthy's willingness to engage in such brinksmanship when negotiating with President Joe Biden, whose Democrats control the Senate. They have raged in the past when Senate Republicans led by Mitch McConnell agreed to compromise deals.

The hardliners, also including Freedom Caucus Chairman Scott Perry and Chip Roy of Texas, said concessions they extracted from McCarthy will make it easier to pursue such tactics this year - or force another vote on McCarthy's leadership if he does not live up to their expectations.

"You have changes in how we're going to spend and allocate money that are going to be historic," said Representative Scott Perry, the chairman of the hard-right House Freedom Caucus.

"We don't want clean debt ceilings to just go through and just keep paying the bill without some counteracting effort to control spending when the Democrats control the White House and control the Senate."

One of those Democrats, Senate Majority Leader Chuck Schumer, warned that the concessions McCarthy made to win the job may come back to haunt him.

"Kevin McCarthy’s concessions to the extremists in his party make it far more likely that the MAGA Republican controlled House will cause a government shutdown or a default with devastating consequences to our country," Schumer said in a statement.

In a sharp contrast to this week's battles among House Republicans, Biden and McConnell appeared together in Kentucky on Wednesday to highlight investments in infrastructure.

McCarthy's belated victory came the day after the two-year anniversary of a January 06, 2021, attack on the US Capitol, when a violent mob stormed Congress in an attempt to overturn then-President Donald Trump's election loss.

This week's 14 failed votes marked the highest number of ballots for the speakership since 1859, in the turbulent years before the Civil war.

McCarthy's last bid for speaker, in 2015, crumbled in the face of right-wing opposition. The two previous Republican speakers, John Boehner and Paul Ryan, left the job after conflict with right-wing colleagues.

Wielding the speaker's gavel will give McCarthy the authority to block Biden's legislative agenda, force votes for Republican priorities on the economy, energy and immigration and move forward with investigations of Biden, his administration and his family.

But McCarthy has agreed to concessions that mean he will hold considerably less power than his predecessor, Democrat Nancy Pelosi, according to sources involved in the talks. That will make it hard for him to agree to deals with Democrats in a divided Washington.

Allowing a single member to call for a vote to remove the speaker will give hardliners extraordinary leverage.

He has also offered influential committee posts to members of the group, lawmakers said, as well as spending restrictions that aim to reach a balanced budget within 10 years. The agreement would cap spending for the next fiscal year at last year's levels - amounting to a significant cut when inflation and population growth are taken into account.

That could meet resistance from more centrist Republicans or those who have pushed for greater military funding, particularly as the United States is spending money to help Ukraine fend off a Russian assault.

Moderate Republican Brian Fitzpatrick said he was not worried that the House would effectively be run by hardliners.

"It's aspirational," he told reporters. "We still have our voting cards."