The House of Representatives has approved an agreement allowing the United States to borrow more money, just days before the world’s largest economy is scheduled to default on its debt.
Despite some defections on both sides of the aisle, the measure easily passed the chamber by a vote of 314-117.
Later this week, the Senate must vote on the bill before President Joe Biden can sign it into law.
On Monday, 5 June, the government is projected to reach its borrowing limit.
This has left legislators with little room for error as they race to prevent the United States from defaulting on its $31.4tn (£25tn) debt, which supports the global financial system.
A default would prevent the government from borrowing additional funds or paying all of its obligations. It would also threaten to destabilize the global economy by influencing prices and mortgage rates in other nations.
On Wednesday evening, 165 Democrats and 149 Republicans approved the 99-page resolution to increase the debt ceiling, allowing it to pass the House with the required simple majority.
With Republicans in control of the lower chamber of Congress and Democrats in control of the upper chamber and the White House, a compromise remained elusive for weeks until President Biden and House Speaker Kevin McCarthy reached a compromise over the weekend.
Mr. Biden commended the Speaker in a statement, stating that he had negotiated in good faith.
“Neither side got everything it wanted,” the president declared. This is the responsibility of leadership.
By enacting a bill that increased the debt limit but also included a laundry list of conservative priorities, Kevin McCarthy was able to force Joe Biden and hesitant Democrats to the negotiating table.
Then, he was able to maintain the unity of his party as he reached an agreement with the president that modestly reduced the growth of federal expenditure and added new conditions to aid low-income Americans.
This was insufficient for a group of staunch conservatives, some of whom indicated that they would unseat Speaker McCarthy and force a new election.
By Wednesday, however, even the most outspoken extremists had moderated their rhetoric. When it came time to vote, the majority of Republicans supported Mr. McCarthy’s proposal.
While the hard-liners may murmur, it is evident that they lack the support necessary to replace Mr. McCarthy or even an idea of who to replace him with.
The agreement suspends the debt ceiling until January 1, 2025. The debt ceiling is the spending limit established by Congress that determines how much money the government can borrow.
The legislation would result in savings of $1.5 trillion over a decade, according to the nonpartisan Congressional Budget Office.
However, the passage of the measure was in jeopardy after lawmakers from both parties expressed opposition.
Extremely conservative Republicans complained that they had obtained too few concessions in exchange for the debt ceiling increase.
Democrats opposed provisions increasing labor requirements for Americans receiving federal food aid and resuming repayment of student loans.
Emanuel Cleaver, a Missouri Democrat, stated he would vote for “the second helping of Satan’s sandwiches.”
Hakeem Jeffries, the leader of the House Democrats, stated that his party had politically rescued the Republican Speaker.
The New York congressman stated, “House Democrats have once again come to the rescue to prevent a dangerous default.”
Eli Crane, a Republican from Arizona who had pledged to stop the bill, tweeted, “More Democrats than Republicans voted for this ‘historic conservative victory’.”
“What a joke.”
With support from political moderates on both sides of the aisle, Speaker McCarthy was able to pass the bill despite the Republicans’ narrow 222-213 majority in the House.
He characterized the proposal as “the largest reduction and savings this Congress has ever approved.”
The bill’s passage is not yet assured. The Senate may need Democratic and Republican votes again to approve it.
Conservative Republican Mike Lee of Utah has promised to use “every procedural tool” to delay the agreement.
Senator Bernie Sanders, of the left, also opposed the measure on Wednesday, stating that he cannot “in good conscience” support it.
Senate Democratic and Republican leaders are working to get Mr. Biden’s signature on a measure this weekend before a default.
Standard & Poor’s cut the US’s credit rating in 2011 as the debt ceiling approached.
The Dow, S&P, and Nasdaq closed 0.4%, 0.6%, and 0.6% lower before Wednesday’s vote.
