On Wednesday night, the Republican-controlled House passed the bi-partisan debt ceiling compromise legislation, known as the Fiscal Responsibility Act, to raise the nation’s borrowing limit and cap future spending.
The deal, negotiated by House Speaker Kevin McCarthy (R-CA) with President Joe Biden, was strongly criticized by both conservative Republicans and far-left Democrats, passing 314 to 117 with 149 Republicans joining 165 Democrats to approve the bill. The Senate was previously unable to pass its own bill.
The measure will add approximately $4 trillion to the national debt by raising the federal debt ceiling to $31.4 trillion while slicing $136 billion in federal spending, including $1.4 billion from the Internal Revenue Service.
The bill also limits non-defense discretionary spending to 1 percent of annual growth, links some welfare benefits to work requirements, and cuts back billions of dollars in unspent COVID relief funds.
According to the Congressional Budget Office, the nation’s debt will be reduced by $1.5 trillion over the next 10 years due to the spending restrictions.
Republicans in the Senate objected that the bill only allowed defense spending to rise approximately 3 percent in the first year of the deal, which is below the rate of inflation.
Sen. Lindsey Graham, (R-SC), said during debate on the bill, “To my House colleagues, I can't believe you did this. To the Speaker, I know you’ve got a tough job. I like you. But the party of Ronald Reagan is dying. Don't tell me that a defense budget that’s $42 billion below inflation fully funds the military."
Graham had also threatened to stall the bill unless assurances were given that defense spending, aid to Ukraine, possible assistance to Taiwan against threats from China and protecting partners in the Middle East would not be limited. Senate Majority Leader Chuck Schumer, (D-NY) and Minority Leader Mitch McConnell, (R-KY) agreed to the conditions.
11 proposed Senate amendments failed to pass during the debate on the legislation, including Republican-supported border provisions and language that would have stripped the approval of the Mountain Valley Pipeline in West Virginia.
Similar to the vote in the House, conservative senators complained cuts did not go far enough while far-left lawmakers said they went too far.
The final deal requires a 1 percent spending cut across-the-board if Congress cannot pass the 12 annual appropriations bills, which it has been unable to do regularly for years. Senate leaders called on Appropriations Chair Patty Murray, (D-WA) and ranking Republican Sen. Susan Collins, (R-ME), to begin to work on the 12 bills to avoid the cut.
The bill now heads to President Joe Biden’s desk where he is expected to sign it, just days before June 5, the day that Treasury Secretary Janet Yellen estimated that the government would run out of money and risk a possible default on its loan payments.
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