The House voted on Wednesday night to approve a bipartisan debt-ceiling deal, averting a default on U.S. debt and securing a victory for House speaker Kevin McCarthy, who managed to keep his caucus together despite a challenge from House Freedom Caucus members intent on securing greater spending concessions from the Biden White House.
After a few hours of debate, the measure passed in the chamber with 314 members in favor and 117 members opposing. A total of 149 Republicans and 165 Democrats approved the bill, while 71 Republicans and 46 Democrats voted against it.
McCarthy (R., Calif.), who brokered the deal, hailed it as the “largest spending cut that Congress has ever voted for,” but faced opposition from members of his caucus who believe the deal didn’t go far enough. Many House Freedom Caucus members, such as Representatives Chip Roy, Dan Bishop, and Byron Donalds, voted against it.
To make up for Republican defections, McCarthy had to rely upon votes from Democrats. While Minority Leader Hakeem Jeffries (D., N.Y) supported the measure, arguing the chamber “cannot allow the perfect to be the enemy of the good,” Democrats also faced dissent from the more progressive wing of the caucus.
On Tuesday, the bill only cleared the Rules Committee by one vote. Two Freedom Caucus members joined Democrats in opposing the bill, who declined to bail Republicans out at this early stage. However, Representative Thomas Massie’s (R., Ky.) vote was critical in pushing the bill to the House floor.
The agreement suspends the nation’s $31.4 trillion debt limit through Jan. 1, 2025, and caps spending in the 2024 and 2025 budgets.
The nonpartisan Congressional Budget Office (CBO) has estimated that the deal will reduce budget deficits by about $1.5 trillion between 2023 and 2033. Director of the CBO Phillip Swagel projected that there would be reductions in discretionary outlays of $1.3 trillion over the 2024–2033 period. Mandatory spending would decrease by $10 billion, revenues would decrease by $2 billion over the same period, and the interest on the public debt would decline by $188 billion.
Biden warned of the consequences of default, saying what would follow would include an economic recession, devastated retirement accounts, and millions of jobs lost.
“I made clear from the start of negotiations that the only path forward was a bipartisan budget agreement,” explained Biden on Twitter. “No one got everything they wanted. But that's the responsibility of governing.”
The bill accomplishes several Republican priorities. Leadership touted the “transformative permitting reforms” included in the bill in a call Tuesday. The changes represent the first time Congress has pursued substantial changes to the National Environmental Policy Act (NEPA) in over 40 years.
The Mountain Valley Pipeline in West Virginia, which will transfer natural gas, was also approved as part of the deal to get the West Virginia congressional delegation, particularly Senator Joe Manchin (D., W.Va.), on board.
McCarthy has also hailed the bill’s tightening of work requirements for welfare programs, which McCarthy said Republicans haven’t been able to get through in modern times, outside of 1995.
In addition to the work requirements, there are other changes to SNAP and TANF, such as an expansion in eligibility for groups such as veterans. Swagel assessed that the changes would lead to an increase in spending of $2.1 billion for the former program, but Republicans have disputed this.
The deal returns unused Covid funds and rescinds certain funds provided to the Internal Revenue Service. Additionally, there is a termination of the pause in student-loan payments, though Republicans did not succeed in pushing through a repeal of Biden’s loan-forgiveness program, pending before the Supreme Court.
The debt deal has been criticized by Republicans as not going far enough, with some arguing defense spending in particular could be upped. The proposed military spending budget would only increase to $886 billion next year.
The bill now moves to the Senate, where both Senate Majority Leader Chuck Schumer (D., N.Y.) and Minority Leader Mitch McConnell (R., Ky.) have signaled they are in favor of the proposal.
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