Debt ceiling deal: US House overwhelmingly passes bill

The House of Representatives has approved a deal that would allow the United States to borrow more money, just days before the world’s largest economy begins repaying its debt.

Despite some flaws on both sides of the aisle, the measure easily passed the chamber by a vote of 314-117.

The US Senate must vote on the bill later this week before President Joe Biden signs it into law.

The government is expected to hit the borrowing limit on Monday, June 5.

That left little margin for error as lawmakers raced to avoid the US defaulting on its $31.4tn (£25tn) debt, which is backed by the World Financial System.

On Wednesday evening, 165 Democrats along with 149 Republicans approved a 99-page bill to raise the debt ceiling.

With Republicans in control of the lower chamber of Congress and Democrats in the upper chamber and the White House, a deal proved elusive for weeks until President Biden and House Speaker Kevin McCarthy signed a bipartisan compromise over the weekend.

In a statement, Mr Biden thanked the Speaker, saying he had negotiated in good faith.

“Neither side got everything they wanted,” the president said. “That’s the responsibility of governing.”

Kevin McCarthy was able to push Joe Biden and reluctant Democrats to the negotiating table by passing a bill that raised the debt ceiling but contained a laundry list of conservative priorities.

He was able to hold his party together as he struck a less ambitious deal with the president that moderated growth in federal spending and added some new conditions to aid for low-income Americans.

That was not enough for a group of hard-line conservatives, some of whom indicated they would sack Mr McCarthy and force a new election for Speaker.

But by Wednesday, even the hottest of the firebrands had backed off their rhetoric. When it came time to vote, a majority of Republicans approved Mr McCarthy’s deal.

Despite hard-liners grumbling, it’s clear they have nowhere near the support they need to replace Mr McCarthy – or even who to replace him with.

The agreement puts the debt ceiling on hold until 1 January 2025.

The nonpartisan Congressional Budget Office said Tuesday that the legislation would save $1.5tn over a decade.

But after lawmakers from both parties voiced opposition, passage of the bill ran into trouble.

Ultra-conservative Republicans complained that they received too few concessions in exchange for raising the debt ceiling.

Democrats opposed provisions to raise work requirements for Americans on federal food assistance and restart student loan repayment.

Emanuel Cleaver, a Missouri Democrat, said he would vote for the bill, even though he considered it “a second serving of Satan’s sandwiches.”

House Democratic Leader Hakeem Jeffries said the Republican Speaker has been released on political bail.

“Once again, House Democrats must come to the rescue to avoid a dangerous default,” the New York congressman said.

Arizona Republican Eli Crane, who has vowed to stop the bill, tweeted: “More Democrats than Republicans voted for this ‘historic conservative victory.’

Republicans control the House by a narrow 222-213 majority, but Speaker McCarthy was able to push the bill over the line with support from political centrists on both sides of the aisle.

He framed the package as “the biggest cut and save this Congress has ever voted on.”

It is not yet confirmed that the bill will pass. It now heads to the Senate, where some combination of Democratic and Republican votes may be needed again.

Mike Lee of Utah, a conservative Republican, has already threatened to use “every practical tool” to block consideration of the deal.

Left-wing Senator Bernie Sanders also came out against the bill on Wednesday, saying he could not “in good conscience” support it.

Both Democratic and Republican leaders in the Senate are working to ensure a bill reaches Mr Biden’s desk for his signature this weekend.

The last time the U.S. came close to exceeding its debt ceiling, in 2011, credit agency Standard & Poor’s downgraded the country’s rating, a move that has yet to be reversed.

Before Wednesday’s vote, U.S. stock markets ended the day slightly lower, with the Dow ending 0.4% lower, while the S&P and Nasdaq both fell 0.6%.

With Nomia Iqbal and Jessica Parker from Capitol Hill