The US House is poised to vote on an urgently needed debt ceiling moratorium

WASHINGTON, May 30 (Reuters) – Legislation brokered by President Joe Biden and House Speaker Kevin McCarthy to raise the $31.4 trillion U.S. debt ceiling and achieve new federal spending cuts passed a critical hurdle late on Tuesday, advancing to debate in the full House of Representatives and a floor vote expected on Wednesday. .

The House Rules Committee voted 7-6 to approve rules allowing debate in the full chamber. Two committee Republicans, Reps. Chip Roy and Ralph Norman, backed their leadership by opposing the bill.

The vote underscored the need for Democrats to help pass the measure in the House, which is controlled by Republicans by a narrow 222-213 majority.

The House passes the bill and sends it to the Senate. The move would require congressional approval before June 5, when the Treasury Department would run out of funds to pay off the debt for the first time in U.S. history.

If the Treasury Department is unable to make all of its payments, or is forced to prioritize payments, it will trigger economic chaos in the U.S. and global economies.

Biden and McCarthy predicted they would get enough votes to pass the 99-page bill into law before the June 5 deadline.

The nonpartisan budget scorekeeper for Congress said Tuesday the legislation would cut spending by $1.5 trillion from its current projections over 10 years starting in 2024.

The Congressional Budget Office also said the measure, if enacted into law, would reduce interest on the public debt by $188 billion.

McCarthy called the bill “the most conservative deal we’ve ever had.”

See also  Mets say Jorge Lopez's post-ejection glove toss 'unacceptable'

Still, some of the House’s most conservative Republicans have not pushed for the deepest spending cuts, and it’s unclear how many Democrats McCarthy should win in a vote expected on Wednesday.

All four Democrats on the Rules Committee voted against the bill, while they voted on the generally Republican-backed legislation. While Democratic Party leader Hakeem Jeffries said his party would give McCarthy the support he needs, it was unclear whether that would influence other Democrats to do the same on Wednesday.

Many Democrats in Congress don’t want Biden to engage in budget-cutting talks with Republicans until they loosen their grip on passing a debt ceiling bill.

Senate battle ahead

President Joe Biden shakes hands with House Speaker Kevin McCarthy of California after the State of the Union address to a joint session of Congress at the Capitol, Tuesday, Feb. 7, 2023, in Washington, DC. Jacqueline Martin/Poole by REUTERS/File Photo

White House Budget Director Shalanda Young, one of Biden’s top negotiators, urged Congress to pass the bill.

“I want to be clear: This agreement represents a compromise, which means no one will get everything they want and hard choices will have to be made,” Young told a news conference.

The Senate vote could extend into the weekend if lawmakers in that chamber try to slow it down.

At least one senator, Republican Mike Lee, has said he might try to do so, and other Republicans have expressed discomfort with some aspects of the deal.

The bill suspends the U.S. debt ceiling until Jan. 1, 2025, allowing Biden and lawmakers to shelve the politically sensitive issue until after the November 2024 presidential election.

It would curb some government spending over the next two years, speed up the approval process for some energy projects, roll back unused COVID-19 funds and introduce work requirements for food assistance programs for some poor Americans.

See also  Wall Street falls sharply on bank contagion fears

In another win for Republicans, it would shift some funding from the Internal Revenue Service, though the White House says it should not cut tax enforcement.

Biden can also point to gains. The deal leaves his signature infrastructure and green-energy laws largely intact, and the spending cuts and job requirements are far less than Republicans would like.

Republicans have argued that steep spending cuts are necessary to control the growth of the national debt, which equates to $31.4 trillion in annual economic output.

Interest payments on that debt are expected to eat up a growing share of the budget as an aging population pushes up health and pension costs, according to government forecasts. The agreement does nothing to limit fast-growing projects.

Much of the savings will come from limiting spending on domestic programs such as housing, education, scientific research, and other types of “discretionary” spending. Military spending will be allowed to increase over the next two years.

The debt ceiling stance prompted ratings agencies to warn that it could downgrade US debt, which supports the global financial system.

Markets have so far responded positively to the deal.

Reporting by Moira Warburton, David Morgan, Richard Cowan, Steve Holland and Graeme Slattery in Washington; Editing by Scott Malone, Mark Porter, Matthew Lewis, Gerry Doyle and Himani Sarkar

Our Standards: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published. Required fields are marked *