Debt ceiling bill passed by House, heads to Senate.

The U.S. House of Representatives has passed a temporary suspension of the nation’s debt ceiling, inching the country away from financial default.

The compromise in the debt ceiling standoff, negotiated by President Joe Biden and House Speaker Kevin McCarthy (R-Calif.), was approved in a bipartisan vote of 314 to 117 on May 31. Seventy-one Republicans voted against the bill.

The Financial Responsibility Act suspends the debt ceiling until Jan. 1, 2025, cuts non-defense discretionary spending slightly in 2024, and limits discretionary spending growth to 1 percent in 2025.

The agreement also contains permitting reforms for oil and gas drilling, changes to work requirements for some social welfare programs, and clawbacks of $20 billion in IRS funding and $30 billion in unspent COVID-19 relief funds.

In the absence of congressional action to allow additional borrowing, the United States would lack the ready cash to pay all of its bills on June 5, according to Treasury Secretary Janet Yellen.

Biden, in a statement after the vote, applauded the House’s passage and urged the Senate to pass the bill as quickly as possible.

An Imperfect Solution

Leaders on both sides portrayed the agreement as a victory, while many rank-and-file members saw it as an imperfect solution.

“Not because it’s perfect. But in a divided government, we cannot allow the perfect to be the enemy of the good.”

That theme was repeated by members of both parties throughout the day.

• Rep. Tom Cole (R-Okla.) said the package represented the “best deal we could have cut” and praised McCarthy for striking the compromise agreement, calling the speaker a “master of the art of the possible.”
• Rep. Teresa Leger Fernandez (D-N.M.) described the bill as saving the country from economic catastrophe but expressed concerns about changes to environmental laws and social safety net programs.
• Rep. Greg Landsman (D-Ohio) simply said, “The bill represents the fact that the Congress is divided.”
• Rep. Delia Ramirez (D-Ill.) voted against the bill, citing concerns about taking away COVID relief dollars for children and seniors.

Wins and Losses

Republicans favored the spending cuts and permitting reforms, while Democrats were pleased with the suspension of the debt ceiling and the clawbacks of IRS funding and unspent COVID-19 relief funds.

“I believe this is an agreement in principle that’s worthy of the American people. That’s historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce and rein in government overreach.”

The bill now heads to the Senate for consideration.