Senate passes debt ceiling bill, sends to Biden

WASHINGTON – The Senate passed a House-approved bill late Thursday to raise the debt ceiling and cap government spending for two years, sending the bill to President Joe Biden’s desk.

He will sign the bill on Friday and address the nation at 7 p.m. ET, just three days before the United States faces its first ever sovereign debt default.

“No one gets everything they want in negotiations, but don’t get me wrong, this bipartisan deal is a big win for the economy and the American people,” Biden said in a post-vote statement.

Stock futures edged higher on Thursday night after the US sidestepped potential economic turmoil.

The compromise debt ceiling bill passed the Senate by a 63-36 margin, with enough Democrat and Republican support to break through the House’s 60-vote threshold for avoiding a filibuster.

But the division within the party was uneven. A majority of 31 Republicans in the Senate voted against the debt ceiling bill, while only 17 Republicans voted for it. On the left, only four Democrats and Vermont independent Senator Bernie Sanders voted to repeal the bill, while 46 other members of the Democratic caucus voted in favor of the bill.

The vote marked the final chapter in a remarkable day of consensus building and rapid-fire voting in the Senate, which normally takes days, not hours, to consider and amend House bills.

Thursday night, the House rejected 11 amendments to the bill. financial responsibility law It passed the House before finally passing the bill itself. Several senators who had serious objections to parts of the bill agreed not to delay the bill on a procedural hold in exchange for being allowed to vote on the amendment.

The driving force behind turbo voting was simple. The June 5 deadline for the Treasury to decide to raise or suspend the debt ceiling was just four days away.

Janet Yellen believes the government will likely be unable to meet its debt obligations after Monday unless Congress passes a higher debt ceiling.

After the Senate vote, Yellen praised the bill, which she said would “completely protect America’s credibility and credit and preserve the financial leadership that is so critical to America’s economic growth and stability.”

With a possible U.S. debt default still out of reach and the clock ticking in the final weeks, investors and market analysts are worried about how a month-long debt ceiling hike will unfold. I’ve been watching you while I’m recruiting.

In a post-vote statement on Thursday, Moody’s said a resolution to the debt ceiling crisis was as expected and indicated it was not considering a downgrade of Treasuries.

“The stable outlook for the US sovereign Aaa credit rating reflects that expectation,” said William Foster, senior vice president at Moody’s Investors Service.

The bill, which passed the Senate on Thursday, was the result of intense and sometimes intense negotiations between allies of House Speaker Kevin McCarthy and the White House. The final deal gave conservatives several ideological policy victories in exchange for a vote to raise the debt ceiling beyond next year’s presidential election until 2025.

Both Biden and McCarthy claimed the result as a victory, but McCarthy criticized new labor requirements such as some federal aid, a two-year government spending cap, and the recovery of unused coronavirus funds. This is because the

The White House’s reaction to progress on the bill passed through Congress this week has been more muted, but officials say it’s a deliberate tactic to avoid alienating Republicans who are gathering the votes needed to pass the bill. rice field.

The bill passed the House in about 72 hours and passed Wednesday night by an overwhelming majority of 314 to 117.

However, despite the bill being the brainchild of House Republican leadership, House Democrats ultimately voted for the bill more than Republicans.

The final vote in the Senate was bipartisan, and that’s not going to be easy.

Senate Majority Leader Chuck Schumer spent much of his day on Thursday trying to reach a consensus with a group of Senate Republicans who asked him to pledge his support for a supplemental defense funding bill before agreeing to an early implementation of the debt ceiling bill.

The current House debt ceiling bill calls for defense spending of $886 billion in fiscal 2024, a 3% increase over the previous year. This figure will increase by 1% to $895 billion in 2025.

But Republican Senator Susan Collins of Maine said on Thursday that this is “woefully inadequate,” saying the 1% hike is effectively tantamount to cutting military spending because it hasn’t kept up with inflation. claimed. The solution was put forward in a rare joint statement by Mr. Schumer and Kentucky Republican Senate Minority Leader Mitch McConnell and read on the floor.

“This debt ceiling agreement provides emergency additional funding to deter China, Russia and other adversaries and to ensure that our military capabilities are sufficient to meet continued and growing national security threats,” Schumer said. It does not limit the Senate’s ability to appropriate “Also, this debt ceiling does not limit the Senate’s ability to allocate emergency supplemental funds to address various national issues, such as disaster relief, responding to the fentanyl crisis, and other issues of national importance.” said Schumer.

The message of the majority leaders was unmistakable: Regardless of what the bill says, the Senate will continue to spend more money to fund what lawmakers think is important.

With the debt ceiling crisis averted, Congress is eyeing spending this summer and negotiating how the ceiling will be spent next year.