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BREAKING Default Crisis Averted:
Senate Passes Debt Ceiling Bill After Months-Long Debate Sara Dorn Forbes Staff Politics Following Jun 1, 2023, 10:59pm EDT | Press play to listen to this article! Got it! Updated Jun 1, 2023, 11:19pm EDT Share to
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Twitter Share to Linkedin Topline The Senate passed legislation to fend off a debt ceiling crisis late Thursday, effectively ending months of partisan haggling that brought the federal government to the brink of a default that would’ve likely triggered a financial disaster. The Senate and House both approved a bipartisan deal to suspend the debt ceiling, averting a default ... [+] days before a federal deadline.
Los Angeles Times via Getty Images Key Facts The Democratic-controlled Senate passed the “Fiscal Responsibility Act” 63-36, suspending the debt ceiling until 2025 just four days before the deadline Treasury Secretary Janet Yellen set for when the U.S. could run out of cash and be unable to pay its bills. Some 46
Democrats and independents plus 17
Republicans voted in favor of the bill, according to the
New York Times ’ tally. Just five members of the
Democratic caucus—Sens. Bernie Sanders (I-Vt.), John Fetterman (D-Penn.), Jeff Merkley (D-Ore.), Ed Markey (D-Mass.) and
Elizabeth Warren (D-Mass.)—voted against the bill along with 31 Republicans. The Senate’s approval comes after the House on Wednesday passed the legislation 314-117, with 165 Democrats and 149 Republicans voting in favor. In addition to allowing the federal government to continue accruing debt until the end of next year, the bill will cap non-defense spending at its current level in the next fiscal year and allow for a 1% increase in fiscal year 2025. What To Watch For The bill now heads to the desk of President
Joe Biden, who helped negotiate the deal with House Speaker Kevin McCarthy (R-Calif.). Biden said in a statement Thursday he will sign the bill into law. Key Background Biden and McCarthy announced Sunday they had reached a deal to prevent the U.S. from defaulting on its debt for the first time in history, marking an end to a last-minute negotiating marathon that came after a months-long stalemate. Both sides acknowledged they did not get everything they wanted out of the legislation—Biden for months said he would not agree to any debt ceiling deal that tacked on other provisions, while House Republicans initially passed a debt ceiling bill in April that would have implemented far more drastic spending cuts and reversals of Biden’s policies. Ultimately, the two sides agreed to a watered-down version of the House legislation, and both claimed it was a win for their respective parties. Chief Critics The legislation faced backlash, mostly from Republicans, as the Senate headed into Thursday’s vote. Sen. Lindsey Graham (R-S.C.), who voted against the legislation, raged against what he said was an inadequate level of defense spending in the deal. The legislation increases defense spending to $886 billion in fiscal year 2024, in line with Biden’s budget proposal. “I want a commitment from the leaders of this body that we’re not pulling the plug on
Ukraine,” he said Thursday from the Senate floor. Sen. John Tester (D-Mont.) also criticized the deal, claiming “it empowers the folks on the far right,” referring to the GOP demands for spending cuts and policy rollbacks in exchange for their votes. Sen. Tim Kaine (D-Va.), who ultimately voted in favor of the deal, also lamented the inclusion of federal permits for a natural gas pipeline, a priority backed by Sen. Joe Machin (D-W.Va) that Kaine has long opposed because it allows the project to circumvent the typical federal approval process. Tangent The bill will also recoup approximately $27 billion in unused Covid-19 money and reduce a new $80 billion in funding for the Internal Revenue Service by approximately $21 billion. It also imposes stricter welfare standards by raising the age food stamp recipients are required to meet minimum work requirements from 49 to 54. In addition, the bill ends a pandemic-era freeze on federal student loan repayments beginning August 30. Further Reading Biden Confident
Congress Will Pass Debt Ceiling Bill Before Deadline—Despite Opposition From Some Lawmakers (Forbes) House Passes Bill To Avert Debt Ceiling Crisis (Forbes) Right-Wing Lawmaker Pushes To Remove McCarthy As Speaker Over Debt Ceiling Deal (Forbes) Follow me on Twitter . Send me a secure tip . Sara Dorn Editorial Standards Print Reprints & Permissions