House Passes Bill To Avert Debt Ceiling Crisis

Topline

The House agreed to suspend the debt ceiling until 2025 on Wednesday in a decisive bipartisan vote on legislation negotiated by House Speaker Kevin McCarthy (R-Calif.) and President Joe Biden, amid a last-minute push to stave off an anticipated financial collapse before a looming June 5 deadline.

President Joe Biden and House Speaker Kevin McCarthy negotiated the debt ceiling deal, as the … [+] country nears a June 5 default deadline.

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Key Facts

The House voted 314-117, with 165 Democrats and 149 Republicans voting in favor of the legislation.

The bill—which now heads to the Senate—would suspend the $31.4 trillion cap on federal borrowing through January 2025, preventing the government from running out of money and defaulting on its obligations early next week, and implement caps on federal spending and rollbacks of some of Biden’s policy priorities.

McCarthy and Biden negotiated the legislation after the GOP-led House passed a debt ceiling bill in April that included much steeper spending cuts and more drastic policy reversals—legislation that served as a negotiating tool for McCarthy in his dealings with the White House.

Many of the opposing votes came from the right and left flanks of each party: On the Democratic side, Reps. Jamaal Bowman (N.Y.), Cori Bush (Mo.) and Alexandria Ocasio-Cortez (N.Y.) voted against the bill, while hard-right Republican Reps. Andy Biggs (Ariz.), Matt Gaetz (Fla.) and Andrew Clyde (Ga.) also voted “no.”

What We Don’t Know

When the Democratic-controlled Senate will vote on the legislation, which it must pass before the Monday deadline Treasury Secretary Janet Yellen has set for when the federal government could default on its debt. Sens. Tim Scott (R-S.C.), who is running for the GOP nomination for president, and Bernie Sanders (I-Vt.) both said they will vote against the legislation. Senate Majority Leader Chuck Schumer

Tangent

The legislation appeared on track toward passage in the House after clearing a procedural hurdle earlier Wednesday, when the House approved the rules governing debate—which is typically a routine practice in which the majority party votes as a bloc to approve the rule. But 29 Republican holdouts, many of whom are right-wing House Freedom Caucus members, voted against the rule in a last-minute bid to stymy the legislation. Fifty-two Democrats joined Republicans in approving the measure, 241-187.

Key Background

Leaders on both sides of the aisle sold the legislation as a win for their respective parties, while acknowledging that both sides would not get everything they want, given the nature of a divided Congress. “Mr. Speaker, the Rolling Stones said, you can’t always get what you want, you get what you need. And we need to avert a default,Democrats urged lawmakers to consider what was left out of the deal, rather than the GOP-backed spending cuts that were included, while Republican negotiators in Congress billed provisions, such as enhanced work requirements for food stamp recipients and a faster permitting process for energy projects, as conservative wins. The legislation caps federal non-defense spending in fiscal year 2024 at its current level and allows for a 1% increase in fiscal year 2025. The bill would cut federal spending by $1.5 trillion over the next decade, according to the Congressional Budget Office, recoup some unused Covid-19 money and lift a freeze on federal student loan repayments in August. Headed into Wednesday’s House vote, McCarthy and House Minority Leader Hakeem Jeffries (D-N.Y.) both expressed confidence that it would pass with a bipartisan consensus, despite a revolt among right-wing lawmakers and discontent among the Congressional Progressive Caucus.

Surprising Fact

At least one right-wing lawmaker, Rep. Dan Bishop (R-N.C.), threatened to trigger a mechanism to remove McCarthy as speaker over the debt ceiling bill, claiming the legislation does not go far enough in addressing the GOP’s demands for cuts to the federal budget and Biden’s policies. Other Republicans, including Reps. Chip Roy (Texas) and Paul Gosar (Ariz.) also suggested McCarthy could face consequences, though Bishop was the only member to publicly endorse a movement to remove him as speaker headed into Wednesday’s vote. Per an agreement McCarthy negotiated with his right-wing detractors during his hard-fought speakership election in January, one member of the conference (rather than the majority or a party leader) can bring a “motion to vacate,” which would require a simple majority to pass.