House Passes Debt Ceiling Bill in Bipartisan Vote to Avert Default

The House on Wednesday overwhelmingly passed legislation negotiated by President Biden and Speaker Kevin McCarthy to suspend the debt ceiling and set federal spending limits, as a broad bipartisan coalition lined up to cast a critical vote to pull the nation back from the brink of economic catastrophe.

The bill would defer the federal debt limit for two years — allowing the government to borrow unlimited sums as necessary to pay its obligations — while imposing two years of spending caps and a string of policy changes that Republicans demanded in exchange for allowing the country to avoid a disastrous default. The 314-to-117 vote came days before the nation was set to exhaust its borrowing limit, and days after a marathon set of talks between White House negotiators and top House Republicans yielded a breakthrough agreement.

With both far-right and hard-left lawmakers in revolt over the deal, it fell to a bipartisan coalition powered by Democrats to push the bill over the finish line, throwing their support behind the compromise in an effort to break the fiscal stalemate that had gripped Washington for weeks. On the final vote, 149 Republicans and 165 Democrats backed the measure, while 71 Republicans and 46 Democrats opposed it.

That was a blow to the Republican speaker, whose hard-fought victory on the measure was dampened by the fact that more Democrats ultimately voted for the bill than members of his own party.

The measure nearly collapsed on its way to the House floor, when hard-right Republicans sought to block its consideration, and in a suspenseful scene, Democrats waited several minutes before swooping in to supply their votes for a procedural measure that allowed the plan to move ahead.

The deal would suspend the $31.4 trillion borrowing limit until January 2025. It would cut federal spending by $1.5 trillion over a decade, according to the Congressional Budget Office, by effectively freezing some funding that had been projected to increase next year and then limiting spending to 1 percent growth in 2025, which is considered a cut because it would be at a lower level than inflation. The legislation would also impose stricter work requirements for food stamps, claw back some funding for I.R.S. enforcement and unspent coronavirus relief money, speed the permitting of new energy projects and officially end Mr. Biden’s student loan repayment freeze.

The compromise was structured with the aim of enticing votes from both parties. It allowed Republicans, who refused to raise the debt ceiling and avert a default without conditions, to say that they succeeded in reducing some federal spending — even as funding for the military and veterans’ programs would continue to grow — while allowing Democrats to say they spared most domestic programs from the severe cuts.

Mr. McCarthy framed the bill on Wednesday as a “small step putting us on the right track” and urged his members to support it.

“We’re finally bending the curve on discretionary spending because of this bill, and we’re doing it while at the same time raising our national defense and our veterans fully funded, with Social Security and Medicare preserved,” Mr. McCarthy said in a speech on the House floor, adding, “That is a major victory.”

Representative Hakeem Jeffries, Democrat of New York and the minority leader, described the deal as a vital step and thanked Democrats for their “efforts to make sure that we push back the extreme MAGA Republican efforts to jam right-wing cuts down the throats of the American people.”

“From the very beginning, House Democrats were clear that we would not allow extreme MAGA Republicans to default on our debt, crash the economy or trigger a job-killing recession,” Mr. Jeffries said. “Under the leadership of President Joe Biden, Democrats kept our promise.”

Mr. Biden lauded the bill’s passage as a “critical step forward to prevent a first-ever default.”

“This budget agreement is a bipartisan compromise,” Mr. Biden, who called congressional leaders after the vote, said in a statement. “Neither side got everything it wanted.”

Not long after the bill passed the House, Senator Chuck Schumer, Democrat of New York and the majority leader, moved to speed it to the floor in that chamber, where it was expected to get quick consideration. Mr. Schumer warned earlier in the day that senators would need to approve the bill without changes to meet the June 5 deadline when the Treasury Secretary Janet L. Yellen has said the government would default without action by Congress.

“I cannot stress enough that we have no margin for error,” he said. “Either we proceed quickly and send this bipartisan agreement to the president’s desk or the federal government will default for the first time ever.”

The vote on Wednesday was a major victory for Mr. McCarthy, the California Republican, who faced a vast challenge in shepherding a debt ceiling increase through a narrowly divided chamber populated by Republicans who have long refused to raise the borrowing limit. Few had expected that Mr. McCarthy would be able to unite his fractious conference around any such measure, much less one negotiated with Mr. Biden, without prompting an attempt by his right flank to oust him.

As of Wednesday, no such effort had materialized, though there still may be political consequences ahead for Mr. McCarthy after a vote that reflected the depth of Republican opposition to the deal he cut.

Representative Dan Bishop, Republican of North Carolina and a member of the ultraconservative House Freedom Caucus, has publicly said that he considered the debt and spending deal grounds for removing Mr. McCarthy from his post. Another member of the group, Representative Ken Buck, Republican of Colorado, told CNN that its members would have “discussions about whether” to try to oust him.

“I’m not suggesting the votes are there to remove the speaker, but the speaker promised that we would operate at 2022 appropriations levels when he got the support to be speaker,” Mr. Buck said. “He’s now changed that to 2023 levels plus one percent. That’s a major change for a lot of people.”

Under the rules House Republicans adopted at the beginning of the year that helped Mr. McCarthy become speaker, any single lawmaker could call for a snap vote to depose him, a move that would require a majority of the House.

Hard-right lawmakers were furious over the compromise, savaging the bill and Mr. McCarthy’s handling of the negotiations as a betrayal.

“No one sent us here to borrow an additional $4 trillion to get absolutely nothing in return,” said Representative Chip Roy, Republican of Texas, who promised “a reckoning about what just occurred.”

In a display of their displeasure, 29 conservative Republicans took the unusual step of breaking ranks on a procedural vote to take up the legislation, normally a formality that passes entirely along party lines.

In a dramatic tableau on the House floor, as the Republican defections piled up, imperiling the deal, Mr. Jeffries finally raised a green voting card in the air, signaling to fellow Democrats that it was time to go ahead and bail Republicans out. A stream of centrist and veteran Democrats — 52 in all — crowded into the well of the House and voted “yes,” rescuing the deal from collapse.

In the final vote on the bill, Mr. McCarthy was able to muster roughly two thirds of Republican votes for the plan — meeting the goal he set — while a huge bloc of Democrats rallied to support it.

But progressive Democrats bristled at the bill, and some said they could not support new work requirements for safety net programs or reward Republicans’ use of the debt ceiling as a political cudgel.

“Republicans need to own this vote,” said Representative Alexandria Ocasio-Cortez, Democrat of New York, who took particular aim at changes to the Supplemental Nutrition Assistance Program and a measure to expedite production of a gas pipeline. “This was their deal. This was their negotiations. They’re the ones trying to come in and cut SNAP, cut environmental protections, trying to ram through an oil pipeline through a community that does not want it.”

“This has been a hostage situation,” Representative Greg Casar of Texas said. “We’re going to get out of the hostage situation. I appreciate the president negotiating down the ransom payment for the hostage. But I think it’s appropriate for progressives to say we never want to be in this situation again.”

Adding to progressive discontent are provisions in the deal that claw back some unspent money from a previous pandemic relief bill, and reduce by $10 billion — to $70 billion from $80 billion — new enforcement funding for the I.R.S. to crack down on tax cheats. They also were up in arms over measures meant to speed permitting of energy projects and to force the president to find budget savings to offset the costs of a unilateral action, like forgiving student loans — though administration officials could circumvent that requirement.

The deal also includes measures meant to avert a government shutdown later this year.

Hard-right Republicans like Mr. Bishop described those provisions as “crumbs,” saying that Mr. McCarthy had failed to win the kind of deep spending cuts the conference had laid out in the debt limit bill the House passed in April. That measure would have cut government programs by an average of 18 percent over a decade in exchange for raising the debt limit.

Carl Hulse, Luke Broadwater, Jim Tankersley and Annie Karni contributed reporting.

NYT – Top Stories