House OKs debt ceiling bill to avoid default, sends Biden-McCarthy deal to Senate
LISA MASCARO, KEVIN FREKING, STEPHEN GROVES and FARNOUSH AMIRI
Associated Press
WASHINGTON — Veering away from a default crisis, the House approved a debt ceiling and budget cuts package late Wednesday, as President Joe Biden and Speaker Kevin McCarthy assembled a bipartisan coalition of centrist Democrats and Republicans against fierce conservative blowback and progressive dissent.
The hard-fought deal pleased few, but lawmakers assessed it was better than the alternative — a devastating economic upheaval if Congress failed to act. Tensions ran high throughout the day as hard-right Republicans refused the deal, while Democrats said “extremist” GOP views were risking a debt default as soon as next week.
With an overwhelming House vote, 314-117, the bill now heads to the Senate with passage expected by week’s end.
McCarthy insisted his party was working to “give America hope” as he launched into a late evening speech extolling the bill’s budget cuts, which he said were needed to curb Washington’s “runaway spending.”
Amid deep discontent from Republicans who said the spending restrictions did not go far enough, McCarthy said it is only a “first step.”
The package makes some inroads in curbing the nation’s debt as Republicans demanded, without rolling back Trump-era tax breaks as Biden wanted. To pass it, Biden and McCarthy counted on support from the political center, a rarity in divided Washington.
In a statement released after the vote, Biden said: “I have been clear that the only path forward is a bipartisan compromise that can earn the support of both parties. This agreement meets that test.”
He called the vote “good news for the American people and the American economy.”
Biden sent top White House officials to the Capitol and called lawmakers directly to shore up backing. McCarthy worked to sell skeptical fellow Republicans, even fending off challenges to his leadership, in the rush to avert a potentially disastrous U.S. default.
Swift passage later in the week by the Senate would ensure government checks will continue to go out to Social Security recipients, veterans and others and would prevent financial upheaval at home and abroad. Next Monday is when the Treasury has said the U.S. would run short of money to pay its debts.
Overall, the 99-page bill restricts spending for the next two years, suspends the debt ceiling into January 2025 and changes some policies, including imposing new work requirements for older Americans receiving food aid and greenlighting an Appalachian natural gas line that many Democrats oppose.
It bolsters funds for defense and veterans, and guts new money for Internal Revenue Service agents.
Raising the nation’s debt limit, now $31 trillion, ensures Treasury can borrow to pay already incurred U.S. debts.
Top GOP deal negotiator Rep. Garret Graves of Louisiana said Republicans were fighting for budget cuts after the past years of extra spending, first during the COVID-19 crisis and later with Biden’s Inflation Reduction Act, with its historic investment to fight climate change paid for with revenues elsewhere.
But Republican Rep. Chip Roy, a member of the Freedom Caucus helping to lead the opposition, said, “My beef is that you cut a deal that shouldn’t have been cut.”
For weeks negotiators labored late into the night to strike the deal with the White House, and for days McCarthy has worked to build support among skeptics. At one point, aides wheeled in pizza at the Capitol the night before the vote as he walked Republicans through the details, fielded questions and encouraged them not to lose sight of the bill’s budget savings.
The speaker has faced a tough crowd. Cheered on by conservative senators and outside groups, the hard-right House Freedom Caucus lambasted the compromise as falling well short of the needed spending cuts, and they vowed to try to halt passage.
A much larger conservative faction, the Republican Study Committee, declined to take a position. Even rank-and-file centrist conservatives were unsure, leaving McCarthy searching for votes from his slim Republican majority.
Ominously, the conservatives warned of possibly trying to oust McCarthy over the compromise.
One influential Republican, former President Donald Trump, held his fire: “It is what it is,” he said of the deal in an interview with Iowa radio host Simon Conway.
House Democratic leader Hakeem Jeffries said it was up to McCarthy to turn out Republican votes in the 435-member House, where 218 votes are needed for approval.
As the tally faltered on an afternoon procedural vote, Jeffries stood silently and raised his green voting card, signaling that the Democrats would fill in the gap to ensure passage. They did, advancing the bill that hard-right Republicans, many from the Freedom Caucus, refused to back.
“Once again, House Democrats to the rescue to avoid a dangerous default,” said Jeffries, D-N.Y.
“What does that say about this extreme MAGA Republican majority?” he said about the party aligned with Trump’s ”Make America Great Again” political movement.
Then, on the final vote hours later, Democrats again ensured passage, leading the tally as 71 Republicans bucked their majority and voted against it.
The nonpartisan Congressional Budget Office said the spending restrictions in the package would reduce deficits by $1.5 trillion over the decade, a top goal for the Republicans trying to curb the debt load.
In a surprise that complicated Republicans’ support, however, the CBO said their drive to impose work requirements on older Americans receiving food stamps would end up boosting spending by $2.1 billion over the time period. That’s because the final deal exempts veterans and homeless people, expanding the food stamp rolls by 78,000 people monthly, the CBO said.
Liberal discontent, though, ran strong as nearly four dozen Democrats also broke away, decrying the new work requirements for older Americans, those 50-54, in the food aid program.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
Joshua Roberts // Getty Images
The Constitution gives Congress the power to borrow money on the United States’ credit and it has imposed a cap or ceiling on how much debt the Treasury can assume to pay for programs already approved. In the past, congressional votes to increase borrowing was a bipartisan affair, but in today’s highly partisan atmosphere, battles over the debt ceiling have brought the country to the brink of default.
By 2012, Republicans had raised the debt ceiling 54 times, and Democrats had upped it 40 times, according to an analysis bythe Guardian. Ronald Reagan boosted the debt ceiling 18 times, and Jimmy Carter and Lyndon Johnson each raised it 10 times.
Economists warn ofsevere consequencesif the United States does not resolve a debt ceiling crisis. Stock prices could tumble, interest rates could soar, and the country’s financial reputation could end in tatters. Domestic programs such as Medicare could be in jeopardy.
Stackercompiled a list of 10 key moments defining how the country’s debt ceiling affects its spending by reviewing news articles, government reports, and academic papers. Here is a look at how we got to where we are and how the crisis might be eased.
Joshua Roberts // Getty Images
The Constitution gives Congress the power to borrow money on the United States’ credit and it has imposed a cap or ceiling on how much debt the Treasury can assume to pay for programs already approved. In the past, congressional votes to increase borrowing was a bipartisan affair, but in today’s highly partisan atmosphere, battles over the debt ceiling have brought the country to the brink of default.
By 2012, Republicans had raised the debt ceiling 54 times, and Democrats had upped it 40 times, according to an analysis bythe Guardian. Ronald Reagan boosted the debt ceiling 18 times, and Jimmy Carter and Lyndon Johnson each raised it 10 times.
Economists warn ofsevere consequencesif the United States does not resolve a debt ceiling crisis. Stock prices could tumble, interest rates could soar, and the country’s financial reputation could end in tatters. Domestic programs such as Medicare could be in jeopardy.
Stackercompiled a list of 10 key moments defining how the country’s debt ceiling affects its spending by reviewing news articles, government reports, and academic papers. Here is a look at how we got to where we are and how the crisis might be eased.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
Universal History Archive // Getty Images
Before 1917, Congress permitted the U.S. Treasury to borrow for specific programs, with each loan needing Congressional authorization in separate legislation. But when the country entered World War I, Congress began to allow the Treasury to sell war bonds, aka Liberty Bonds, as needed. The Second Liberty Bond Act of 1917 established a debt ceiling of $11.5 billion. Congress continued to permit the Treasury more latitude during the 1920s and 1930s until imposing an overall limit on federal debt in 1939 of $45 billion. That was about 10% above the total debt, according to the Committee for a Responsible Federal Budget.
Universal History Archive // Getty Images
Before 1917, Congress permitted the U.S. Treasury to borrow for specific programs, with each loan needing Congressional authorization in separate legislation. But when the country entered World War I, Congress began to allow the Treasury to sell war bonds, aka Liberty Bonds, as needed. The Second Liberty Bond Act of 1917 established a debt ceiling of $11.5 billion. Congress continued to permit the Treasury more latitude during the 1920s and 1930s until imposing an overall limit on federal debt in 1939 of $45 billion. That was about 10% above the total debt, according to the Committee for a Responsible Federal Budget.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
Ramin Talaie // Getty Images
The debt limit has been revised about 100 times since the end of World War II. It increased three-fold in the 1980s, from less than $1 trillion to nearly $3 trillion, then doubled in the next decade, to nearly $6 trillion in the 1990s, according to the Committee for a Responsible Federal Budget. The ceiling doubled again in the 2000s to more than $12 trillion. The Budget Control Act of 2011 increased it by $900 billion and in addition, authorized the president to raise it by another $1.2 trillion. Separately legislators have suspended the ceiling seven times since 2013, and on a few occasions it has gone down.
Ramin Talaie // Getty Images
The debt limit has been revised about 100 times since the end of World War II. It increased three-fold in the 1980s, from less than $1 trillion to nearly $3 trillion, then doubled in the next decade, to nearly $6 trillion in the 1990s, according to the Committee for a Responsible Federal Budget. The ceiling doubled again in the 2000s to more than $12 trillion. The Budget Control Act of 2011 increased it by $900 billion and in addition, authorized the president to raise it by another $1.2 trillion. Separately legislators have suspended the ceiling seven times since 2013, and on a few occasions it has gone down.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
NIELS CHRISTIAN VILMANN // Getty Images
Among major Western countries, only Denmark has a ceiling on its debt and it is relatively much higher to its spending. After its debt neared 75% of the ceiling in 2010, the limit was more than doubled, the Council on Foreign Relations noted. Denmark put the limit in place in the 1990s when it delegated the country’s finances to its central bank. Unlike the U.S., Denmark does not let political drama interfere.
NIELS CHRISTIAN VILMANN // Getty Images
Among major Western countries, only Denmark has a ceiling on its debt and it is relatively much higher to its spending. After its debt neared 75% of the ceiling in 2010, the limit was more than doubled, the Council on Foreign Relations noted. Denmark put the limit in place in the 1990s when it delegated the country’s finances to its central bank. Unlike the U.S., Denmark does not let political drama interfere.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
Wally McNamee // Getty Images
When Ronald Reagan ran for president in 1980, he blasted the size of the federal debt, then about $1 trillion. "So-called temporary increases or extensions in the debt ceiling have been allowed 21 times in these 10 years, and now I've been forced to ask for another increase in the debt ceiling or the government will be unable to function past the middle of February,” he said in a speech in February 1981 after taking office. “And I've only been here 16 days." But far from falling, the national debt tripled over the decade to $3 trillion, and President Reagan ended up raising the ceiling 18 times. He blamed Congress.
Wally McNamee // Getty Images
When Ronald Reagan ran for president in 1980, he blasted the size of the federal debt, then about $1 trillion. "So-called temporary increases or extensions in the debt ceiling have been allowed 21 times in these 10 years, and now I've been forced to ask for another increase in the debt ceiling or the government will be unable to function past the middle of February,” he said in a speech in February 1981 after taking office. “And I've only been here 16 days." But far from falling, the national debt tripled over the decade to $3 trillion, and President Reagan ended up raising the ceiling 18 times. He blamed Congress.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
Consolidated News Pictures // Getty Images
Georgia’s Newt Gingrich became speaker of the House in 1994 when Republicans gained the majority, and the fiscal conservative zeroed in on trying toenact the deep budget cutshe favored. He refused to schedule a vote on increasing the limit until President Clinton agreed to the Republicans’ balanced budget. The result? Apartial government shutdownthat roiled the country over 21 days at the end of 1995 and the beginning of 1996, until the GOP gave way in the face ofpublic opposition.
Consolidated News Pictures // Getty Images
Georgia’s Newt Gingrich became speaker of the House in 1994 when Republicans gained the majority, and the fiscal conservative zeroed in on trying toenact the deep budget cutshe favored. He refused to schedule a vote on increasing the limit until President Clinton agreed to the Republicans’ balanced budget. The result? Apartial government shutdownthat roiled the country over 21 days at the end of 1995 and the beginning of 1996, until the GOP gave way in the face ofpublic opposition.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
The White House // Getty Images
Republican opposition to the Affordable Care Act led to an impasse over the debt limit in 2011, and spurred Standard & Poor’s to downgrade the U.S. credit rating. President Barack Obama and Congress came together on the Budget Control Act of 2011, which boosted the debt ceiling by $900 billion and authorized the president to raise it by another $1.2 trillion.
The White House // Getty Images
Republican opposition to the Affordable Care Act led to an impasse over the debt limit in 2011, and spurred Standard & Poor’s to downgrade the U.S. credit rating. President Barack Obama and Congress came together on the Budget Control Act of 2011, which boosted the debt ceiling by $900 billion and authorized the president to raise it by another $1.2 trillion.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
The Washington Post // Getty Images
In 2011, Sen. Mitch McConnell, the Kentucky Republican who at the time was the Senate minority leader, proposed that the president be responsible for raising the cap subject to congressional review. Congress could block any increase with a joint resolution. There is no suggestion that he would support such a plan now, CBNC notes. In the current standoff, Senator McConnell insisted Democrats raise the debt limit on their own without GOP help, then in November 2021 began discussions with Senate Majority Leader Chuck Schumer about heading off a government shutdown in December.
The Washington Post // Getty Images
In 2011, Sen. Mitch McConnell, the Kentucky Republican who at the time was the Senate minority leader, proposed that the president be responsible for raising the cap subject to congressional review. Congress could block any increase with a joint resolution. There is no suggestion that he would support such a plan now, CBNC notes. In the current standoff, Senator McConnell insisted Democrats raise the debt limit on their own without GOP help, then in November 2021 began discussions with Senate Majority Leader Chuck Schumer about heading off a government shutdown in December.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
Bill Clark // Getty Images
During the debt ceiling crisis of 2013, the limit was suspended for a time and the Treasury took what is known as extraordinary measures, which typically include suspending new investments or payments to federal employees’ retirement accounts. The Government Accounting Office found there was nevertheless a cost to taxpayers. As the date neared when the Treasury would have no other options, some investors eschewed Treasury securities, worried they would not be paid on time. Others insisted on a greater return for the risk they faced.
Bill Clark // Getty Images
During the debt ceiling crisis of 2013, the limit was suspended for a time and the Treasury took what is known as extraordinary measures, which typically include suspending new investments or payments to federal employees’ retirement accounts. The Government Accounting Office found there was nevertheless a cost to taxpayers. As the date neared when the Treasury would have no other options, some investors eschewed Treasury securities, worried they would not be paid on time. Others insisted on a greater return for the risk they faced.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
Tom Williams // Getty Images
The debt ceiling was suspended until July 31, 2021, under the Bipartisan Budget Act of 2019. The ceiling stood at $22 trillion when Congress passed the bill and since then the government has borrowed $6.5 trillion as of June 30, 2021. When it was reimposed in August, and the debt had climbed to $28.5 trillion, the Treasury again was faced with taking extraordinary measures to avoid defaulting on its loans. In October 2021, Democrats who control the House temporarily raised the borrowing limit to $28.9 trillion. The vote delayed the deadline for a default only until December 2021.
Tom Williams // Getty Images
The debt ceiling was suspended until July 31, 2021, under the Bipartisan Budget Act of 2019. The ceiling stood at $22 trillion when Congress passed the bill and since then the government has borrowed $6.5 trillion as of June 30, 2021. When it was reimposed in August, and the debt had climbed to $28.5 trillion, the Treasury again was faced with taking extraordinary measures to avoid defaulting on its loans. In October 2021, Democrats who control the House temporarily raised the borrowing limit to $28.9 trillion. The vote delayed the deadline for a default only until December 2021.
Biden, congressional leaders meet to discuss nation’s debt limit; McCarthy sees ‘no new movement’
Alex Wong // Getty Images
As theDecember 2021 deadlineapproaches for another debt ceiling crisis, Senate Majority Leader Chuck Schumer of New York and the Senate Minority Leader Mitch McConnell of Kentucky held discussions on how to avert a default. The Treasury Department warned of a Dec. 15 deadline, after which it will be unable to meet its financial obligations. Senator Joe Manchin of West Virginia suggested there may be a way to pass legislation with a simple majority instead of the 60 votes usually required. MeanwhileTreasury Secretary Janet Yellensaid she supports discarding the borrowing limit as it’s currently structured. Proposals that were introduced in Congress include appealing the limit outright or transferring authority over the borrowing limit to the Treasury Department.
Alex Wong // Getty Images
As theDecember 2021 deadlineapproaches for another debt ceiling crisis, Senate Majority Leader Chuck Schumer of New York and the Senate Minority Leader Mitch McConnell of Kentucky held discussions on how to avert a default. The Treasury Department warned of a Dec. 15 deadline, after which it will be unable to meet its financial obligations. Senator Joe Manchin of West Virginia suggested there may be a way to pass legislation with a simple majority instead of the 60 votes usually required. MeanwhileTreasury Secretary Janet Yellensaid she supports discarding the borrowing limit as it’s currently structured. Proposals that were introduced in Congress include appealing the limit outright or transferring authority over the borrowing limit to the Treasury Department.
House OKs debt ceiling bill to avoid default, sends Biden-McCarthy deal to Senate
Susan Walsh, Associated Press
President Joe Biden waves after talking with reporters on the South Lawn of the White House on Wednesday before traveling to Colorado to deliver the commencement address at the U.S. Air Force Academy.
Susan Walsh, Associated Press
President Joe Biden waves after talking with reporters on the South Lawn of the White House on Wednesday before traveling to Colorado to deliver the commencement address at the U.S. Air Force Academy.
House OKs debt ceiling bill to avoid default, sends Biden-McCarthy deal to Senate
J. Scott Applewhite, Associated Press
House Minority Leader Hakeem Jeffries, D-N.Y., arrives to lead the House Democratic Caucus before Wednesday's vote on the debt limit deal in Washington.
J. Scott Applewhite, Associated Press
House Minority Leader Hakeem Jeffries, D-N.Y., arrives to lead the House Democratic Caucus before Wednesday's vote on the debt limit deal in Washington.
House OKs debt ceiling bill to avoid default, sends Biden-McCarthy deal to Senate
Jacquelyn Martin, Associated Press
Rep. Scott Perry, R-Pa., left, and Rep. Chip Roy, R-Texas, speak Tuesday in Washington as members of the conservative House Freedom Caucus talk about the debt limit deal.
Jacquelyn Martin, Associated Press
Rep. Scott Perry, R-Pa., left, and Rep. Chip Roy, R-Texas, speak Tuesday in Washington as members of the conservative House Freedom Caucus talk about the debt limit deal.
Joshua Roberts // Getty Images