1-6-2023 (WASHINGTON) A crucial procedural hurdle for the US debt ceiling bill was cleared in the House of Representatives on Wednesday, paving the way for a vote on the bipartisan deal itself. The bill aims to suspend the US government’s $31.4 trillion debt ceiling and prevent a catastrophic default. With Republicans holding a slim majority of 222-213 in the House, the legislation requires support from both Speaker Kevin McCarthy’s Republicans and President Joe Biden’s Democrats to pass, as several members from both parties have reservations about certain aspects of the bill.
The procedural vote, which permits the start of debate and subsequent voting on the bill, passed with a vote of 241-187, with 52 Democrats needed to overcome opposition from 29 Republicans.
McCarthy expressed confidence that the next vote, expected around 0030 GMT (8.30am Singapore time), would succeed, stating to reporters, “It’s going to become law.” The bill proposes suspending the US debt ceiling until January 1, 2025, effectively removing the limit until that date. This allows Biden and lawmakers to avoid the politically sensitive issue until after the presidential election in November 2024.
Additionally, the bill proposes capping certain government spending over the next two years, expediting the permitting process for select energy projects, reclaiming unused COVID-19 funds, and expanding work requirements for food aid programs to include more recipients.
The White House stated that Biden anticipates having the legislation on his desk by a June 5 deadline, which is when the federal government could potentially run out of funds to meet its financial obligations.
Upon a successful House vote, the bill will proceed to the Senate, where there is a potential for delay unless Senate Majority Leader Chuck Schumer and Republican leader Mitch McConnell agree to expedite the legislation.
Republicans are requesting that Schumer allow amendment votes in exchange for swift action. However, Schumer seemed to dismiss the possibility of amendments on Wednesday, telling reporters, “We cannot send anything back to the House, plain and simple. We must avoid default.”
The Treasury Department has warned that if Congress does not raise the debt ceiling, it will be unable to cover all of the government’s financial commitments by Monday.
During Tuesday’s debate in the House Rules Committee, Republican Representative Chip Roy, known for his staunch views, expressed dissatisfaction that the bill did not achieve the significant budget savings many conservatives had hoped for. Roy questioned, “How on Earth is this going to be beneficial?”
Late on Tuesday, the non-partisan Congressional Budget Office stated that the legislation would result in savings of $1.5 trillion over a decade.
Senate debate and voting could extend into the weekend, particularly if any of the 100 senators attempt to slow down the passage.
SENATORS STAKE THEIR POSITIONS
Republican Senator Rand Paul, known for delaying Senate votes, stated that he would not obstruct the passage if allowed to propose an amendment for a floor vote.
Senator Bernie Sanders, an independent who aligns with the Democrats, expressed his opposition to the bill due to the inclusion of an energy pipeline and additional work requirements. Sanders stated on Twitter, “I cannot, in good conscience, vote for the debt ceiling deal.”
White House Budget Director Shalanda Young, one of Biden’s main negotiators, urged Congress to pass the bill. Young emphasized, “I want to be clear: This agreement represents a compromise, which means no one gets everything that they want and hard choices had to be made.”
In a win for Republicans, the bill would redirect some funding away from the Internal Revenue Service, although the White House asserts that it would not undermine tax enforcement.
There are also gains for Biden. The deal largely preserves Biden’s flagship infrastructure and green-energy laws, and the spending cuts and work requirements are significantly less than what Republicans had initially sought.
Republicans argue that substantial spending cuts are necessary to restrain the growth of the national debt, which stands at $31.4 trillion, roughly equivalent to the annual economic output. Government forecasts predict that interest payments on this debt will consume a larger portion of the budget as the aging population drives up healthcare and retirement costs. However, the proposed deal does not address these rapidly expanding programs.
Most of the savings in the bill would come from capping spending on domestic programs such as housing, education, scientific research, and other forms of discretionary spending. Military spending would be permitted to increase over the next two years.
The debt-ceiling standoff has prompted ratings agencies to issue warnings about a potential downgrade of US debt, which forms the foundation of the global financial system.
The last time the US faced a similar threat of default was in 2011, during a period of intense partisan division in Washington, with a Democratic president, a Senate majority, and a Republican-majority House.
