US avoids default as Senate passes debt ceiling bill with bipartisan support

WASHINGTON: Anticipating a US default, the Senate late Thursday gave final approval to a package of debt ceiling and budget cuts, grinding into the night to wrap up work on a bipartisan deal and fast forward to becoming law before President Joe Biden Send to table – Deadline. Neither Republicans nor Democrats are entirely happy with the outcome on the compromise package between Biden and House Speaker Kevin McCarthy. But the result, after weeks of hard-fought budget negotiations, overshadowed the issue of the unsustainable debt ceiling, which threatens the US and global economy through 2025 after the next presidential election.

Approval in the Senate on a bipartisan vote, 63-36, mirrored the overwhelming majority of the House a day earlier, which relied on centrists in both parties to pass the Biden-McCarthy package. Senate Majority Leader Chuck Schumer said the bill’s passage means “America can breathe a sigh of relief.” “We are avoiding default,” he said.

Fast action was crucial if Washington hopes to meet next Monday’s deadline, when the Treasury said the US would start running short of cash to pay its bills, raising the risk of a catastrophic default. . Raising the nation’s debt ceiling, now $31.4 trillion, would ensure the Treasury can borrow to pay off the US debt it has already spent.

In the end, the debt ceiling showdown was a familiar high-stakes battle in Congress, a battle championed by McCarthy and a Democratic president facing a new era of divided government in Washington driven by a hard-right-wing House Republican majority.

Having once refused a routine vote to allow the country’s debt limit to be raised without concessions, McCarthy brought Biden’s White House to the negotiating table to strike a deal that would curb the country’s deficit. For the purpose of imposing forces to cut expenditure.

Overall, the 99-page bill restricts spending for the next two years, suspends the debt ceiling through January 2025 and makes some policy changes, including imposing new work requirements for older Americans and a Including greenlighting the Appalachian natural gas line, which many Democrats oppose.

It boosts funding for defense and veterans, cuts new money for Internal Revenue Service agents and rejects Biden’s calls to roll back Trump-era tax breaks and cover the nation’s deficit. helps. It automatically cuts 1% if Congress fails to approve its annual spending bills.

After the House approved the massive package late Wednesday, Senate Republican leader Mitch McConnell indicated he, too, did not want to waste any time making sure it became law. Describing his budget cuts, McConnell said Thursday, “The Senate has a chance to make that important progress a reality.”

After remaining largely aloof during most of the Biden-McCarthy talks, several senators insisted on debating their ideas for reshaping the package. But making any changes at this stage would certainly derail the deal and none were approved.

Instead, senators dragged into a late-night round of voting, rejecting the various amendments but clarifying their priorities. Conservative Republican senators wanted further spending cuts, while Democratic Sen. Tim Kaine of Virginia sought to rescind approval of the Mountain Valley pipeline.

The energy pipeline is critical of Sen. Joe Manchin, DW.VA, and he defended the ongoing development in his state, saying the country could not run without the power of gas, coal, wind and all available energy sources.

But, offering an amendment to remove the pipeline from the package, Kaine argued that it would not be appropriate for Congress to step in on a controversial project that he said would also move through his state and into Appalachia. Will explore those lands that have been in families for generations. ,

Defense hawks, led by Sen. Lindsey Graham of South Carolina, have complained staunchly that military spending, though increased in the deal, has not been enough to keep pace with inflation — especially as they eye supplemental spending that will begin this summer. In would be necessary to support Ukraine against the war. Tipped by Russian President Vladimir Putin.

“Putin’s invasion is a defining moment of the 21st century,” Graham argued from the Senate floor. “What the House did is wrong.”

He secured a compromise from Schumer, which he read on the floor, to limit the Senate’s ability to approve other emergency supplemental funds for national security, for Ukraine, or for disaster relief and other issues. For the debt ceiling deal “does nothing” of national importance.

For weeks, negotiators worked late into the night to strike a deal with the White House, and for days McCarthy worked to build support among skeptics.

Tensions had risen in the House the night before as right-wing Republicans refused to make the deal. Ominously, conservatives warned of possible attempts to oust McCarthy on the issue.

But Biden and McCarthy formed a bipartisan coalition, with Democrats ensuring passage on a strong vote of 314-117. All told, 71 House Republicans broke with McCarthy for rejecting the accord.

McCarthy, R-Calif., later said, “We did pretty well.”

As for discontent from Republicans that the spending restrictions did not go far enough, McCarthy said it was only a “first step”.

The White House immediately turned its attention to the Senate, with its top staff calling individual senators.

Democrats also had complaints, reducing new work requirements for older Americans, those 50-54, to the food assistance program, changes to the landmark National Environmental Policy Act and approval of the controversial Mountain Valley Pipeline natural gas project, which they argue that it is useless. Fighting climate change.

The nonpartisan Congressional Budget Office said the spending restrictions in the package would reduce the deficit by $1.5 trillion over the decade, a top target for Republicans trying to curb the debt load.

Surprisingly complicating Republican support, however, the CBO said their campaign to impose work requirements on older Americans receiving food stamps would increase spending by $2.1 billion over the time period. The CBO said that’s because the final deal exempts veterans and the homeless, allowing the food stamp roll to expand by 78,000 people monthly.