The U.S. House of Representatives, controlled by Republicans, voted 314-117 to suspend the $31.4 trillion debt ceiling. The bill received support from both Democrats and Republicans to avoid a catastrophic default. It now goes to the Senate before a Monday deadline when the government is expected to run out of funds.
The legislation, a compromise between President Biden and House Speaker Kevin McCarthy, faced opposition from 71 hardline Republicans. However, with support from 165 Democrats and 149 Republicans, the bill passed through the House.
Debt Ceiling Suspension and Spending Caps
The bill suspends the federal government’s borrowing limit until January 1, 2025, temporarily removing it. This allows postponement of the politically sensitive issue until after the 2024 presidential election. The bill also includes spending caps over the next two years, expedites energy project permits, claws back unused COVID-19 funds, and expands work requirements for food aid programs.
Opposition and Progressive Democrats’ Concerns
Hardline Republicans sought deeper spending cuts and stricter reforms, expressing dissatisfaction with the bill. Progressive Democrats, initially resistant to debt ceiling negotiations, opposed the bill due to new work requirements in anti-poverty programs.
Next Steps in the Senate
Senate leaders from both parties aim to pass the bill before the weekend, but potential delays over amendment votes may arise. Republicans want votes on their amendments, but Senate Majority Leader Chuck Schumer ruled out amendments to avoid default. The Senate debate and voting process could extend into the weekend, especially if any senator slows down the passage.
Views of Senators Paul and Sanders
Senator Rand Paul, known for delaying votes, won’t obstruct passage if allowed to offer an amendment. Senator Bernie Sanders opposes the bill due to an energy pipeline and additional work requirements.
Implications and Credit Rating Agencies
Passing the bill would temporarily resolve the debt ceiling issue. The bill involves funding shifts away from the IRS but largely maintains Biden’s infrastructure and green-energy laws. It falls short of Republicans’ initial spending cut and work requirement goals. The debt-ceiling standoff prompted warnings from credit rating agencies about a possible U.S. debt downgrade, impacting the global financial system.
The House passed the bill to suspend the debt ceiling, with Senate action expected. The legislation provides a temporary solution, avoiding default and addressing the government’s financial obligations.