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.”
