House Overwhelmingly Approves Debt Ceiling and Budget Cuts Package, Sending it to Senate for Swift Passage

Picture Source: APNews

House Overwhelmingly Approves Debt Ceiling and Budget Cuts Package, Sending it to the Senate

In a crucial move to avert a potentially catastrophic economic crisis, the House of Representatives has passed a debt ceiling and budget cuts package with an overwhelming majority. The deal, negotiated by President Joe Biden and Speaker Kevin McCarthy, will now be sent to the Senate for swift passage before an impending deadline.

While the compromise received mixed reviews and pleased few lawmakers, it was considered a necessary step to prevent a devastating economic upheaval if Congress failed to act. Tensions ran high as hard-right Republicans refused to support the deal. However, Biden and McCarthy managed to assemble a bipartisan coalition that secured a robust 314-117 vote late Wednesday.

Speaker McCarthy, a Republican from California, expressed his satisfaction with the outcome, stating, “We did pretty dang good.”

Despite the discontent from Republicans who believed the spending restrictions were insufficient, McCarthy acknowledged that this was only the “first step” in addressing the nation’s financial challenges.

President Biden, monitoring the voting results from Colorado Springs where he was scheduled to deliver a commencement address at the U.S. Air Force Academy, reached out to McCarthy and other congressional leaders after the vote. In a statement, Biden described the outcome as “good news for the American people and the American economy.”

The urgency to pass the package stems from the impending deadline when the Treasury warned that the United States would run short of funds, risking a dangerous default. Lawmakers in Washington are working diligently to finalize the package to ensure the government can continue to meet its financial obligations and prevent financial turmoil both domestically and internationally.

In order to secure support for the package, President Biden personally contacted lawmakers to shore up backing, while Speaker McCarthy worked to convince skeptical fellow Republicans, even facing challenges to his own leadership. A similar bipartisan effort will be required in the Senate to overcome objections and ensure the bill’s passage.

The 99-page bill, which addresses the nation’s deficits as demanded by Republicans, does not roll back the tax breaks introduced during the Trump era, as desired by President Biden. The package includes spending restrictions for the next two years, extends the debt ceiling until January 2025, and introduces new policies such as work requirements for older Americans receiving food aid. It also approves an Appalachian natural gas line, despite opposition from many Democrats. The bill allocates additional funds for defense and veterans, but significantly reduces new funding for Internal Revenue Service agents.

Raising the nation’s debt limit, currently at $31 trillion, is crucial to ensuring that the Treasury can borrow funds to pay off the existing U.S. debts.

Representative Garret Graves of Louisiana, the top GOP negotiator for the deal, emphasized that Republicans were fighting for budget cuts after years of increased spending due to the COVID-19 crisis and President Biden’s Inflation Reduction Act, which includes historic investments to combat climate change funded through revenues from other sources. However, Republican Representative Chip Roy, a member of the Freedom Caucus, criticized the deal, stating, “My beef is that you cut a deal that shouldn’t have been cut.”

Negotiations for the package involved extensive discussions between the White House and lawmakers, with Speaker McCarthy working diligently to build support among skeptical Republicans. Pizza was even brought in as aides worked late into the night at the Capitol, briefing Republicans on the details of the bill and addressing their concerns, all while emphasizing the bill’s budget savings.

McCarthy faced a challenging audience, as the hard-right House Freedom Caucus and other conservative groups denounced the compromise, deeming it insufficient in terms of spending cuts. These factions even threatened to impede the bill’s passage, and there were ominous warnings about attempting to remove McCarthy from his position.

However, one notable Republican, former President Donald Trump, refrained from criticizing the deal, stating, “It is what it is,” during an interview with an Iowa radio host.

House Democratic leader Hakeem Jeffries stressed that it was McCarthy’s responsibility to rally Republican votes in the 435-member chamber, where at least 218 votes are needed for approval. As the tally faltered during an afternoon procedural vote, Jeffries raised his green voting card, signaling that the Democrats would ensure passage. The Democrats ultimately played a crucial role in advancing the bill, as hard-right Republicans, including many from the Freedom Caucus, refused to back it.

Jeffries praised House Democrats for once again averting a dangerous default, while questioning the extreme positions of the Republican majority aligned with Trump’s “Make America Great Again” political movement.

In the final vote, Democrats once again played a significant role in securing passage, with 71 Republicans dissenting against the bill, despite their majority. The nonpartisan Congressional Budget Office (CBO) estimated that the spending restrictions in the package would reduce deficits by $1.5 trillion over the next decade, a key objective for Republicans aiming to address the nation’s debt burden.

However, the CBO’s analysis revealed an unexpected complication for Republicans. The inclusion of work requirements for older Americans receiving food stamps, a provision intended to curb spending, would actually increase spending by $2.1 billion over the same period. The final deal exempts veterans and homeless individuals from the work requirements, resulting in an expansion of the food stamp rolls by approximately 78,000 people per month, according to the CBO.

Liberal discontent was also evident, with nearly four dozen Democrats breaking ranks to oppose the bill due to their concerns over the new work requirements for older Americans (aged 50-54) in the food aid program.

Furthermore, some Democrats expressed frustration with the White House for negotiating changes to the landmark National Environmental Policy Act and approving the controversial Mountain Valley Pipeline natural gas project. While the project is important to Senator Joe Manchin of West Virginia, many other Democrats view it as counterproductive to the fight against climate change.

As news of the package circulated, stock prices on Wall Street experienced a decline.

In the Senate, Democratic Majority Leader Chuck Schumer and Senate Republican leader Mitch McConnell are working toward passage by the end of the week. Schumer stressed the importance of avoiding any mistakes in the process.

Senators, who have remained relatively passive during the negotiations, are pushing for amendments to reshape the package. However, with limited time before the deadline on Monday, making significant changes seems unlikely. The focus now rests on ensuring that the Senate follows the House’s lead and approves the package, thereby averting a potentially disastrous default.