WASHINGTON (AP) — Averting a U.S. bankruptcy, the Senate gave final approval late Thursday to the debt ceiling and budget cuts package, extending through the night to finish work on the bipartisan deal and send it to President Joe Biden’s desk. to become law before the rapidly approaching deadline.
The compromise package negotiated between Biden and House Speaker Kevin McCarthy leaves neither Republicans nor Democrats completely satisfied with the outcome. But the outcome, after weeks of hard-fought budget negotiations, postpones the volatile debt-ceiling issue that risks upending the U.S. and global economy until 2025, after the next presidential election.
The Senate approval on a bipartisan vote, 63-36, mirrored the overwhelming House count from the day before, counting on centrists in both parties to pull the Biden-McCarthy package for passage.
Senate Majority Leader Chuck Schumer said the bill’s passage means “America can breathe a sigh of relief.”
He said, “We avoid default.”
Swift action was vital if Washington hoped to meet a deadline next Monday, when the Treasury Department said the US would run short of cash to pay its bills, risking a devastating bankruptcy. Raising the national debt limit, which is now $31.4 trillion, would ensure that the Treasury can borrow to pay off already incurred U.S. debt.
After all, the showdown over the debt ceiling was a familiar high-stakes battle in Congress, a battle championed by McCarthy and driven by a hard-right Republican majority, confronting the Democratic president with a new era of divided government in Washington.
Refusing a once-routine vote to allow the nation’s debt limit to be raised without concessions, McCarthy brought the Biden White House to the negotiating table to hammer out a deal that mandates spending cuts aimed at curbing the nation’s deficits.
Overall, the 99-page bill limits spending for the next two years, suspends the debt ceiling until January 2025 and changes some policies, including imposing new work requirements for older Americans on food assistance and giving the green light to an Appalachian natural gas pipeline that many Democrats oppose.
It bolsters defense and veterans funds, cuts new money for Internal Revenue Service agents and rejects Biden’s call to roll back Trump-era tax cuts for corporations and the wealthy to help cover the nation’s deficits. It imposes automatic 1 percent cuts if Congress fails to approve annual spending bills.
After the House of Representatives overwhelmingly approved the package late Wednesday, Senate Republican Leader Mitch McConnell signaled that he, too, wanted to waste no time in making sure it became law.
Touting his budget cuts, McConnell said Thursday, “The Senate has a chance to make this important progress a reality.”
After remaining largely on the sidelines during much of the Biden-McCarthy negotiations, several senators pushed for a debate on their ideas for reformatting the package. But making any changes at this stage would almost certainly have broken the compromise, and none were approved.
Instead, senators dragged out the vote late into the night, rejecting the various amendments but clarifying their preferences. Conservative Republican senators wanted to include further spending cuts, while Democratic Sen. Tim Kaine of Virginia wanted to rescind approval of the Mountain Valley Pipeline.
The energy pipeline is important to Sen. Joe Manchin, DW.Va., and he defended the development going through his state, saying the country can’t run without the power of gas, coal, wind and all available energy sources.
But in offering an amendment to remove the pipeline from the package, Kaine argued it wouldn’t be fair for Congress to step in on a controversial project that he said would also pass through his state and grab Appalachian lands that have been in families for generations.
Defense hawks, led by Sen. Lindsey Graham of South Carolina, have complained loudly that military spending, while increased in the deal, is not enough to keep up with inflation — especially when looking at additional spending that would be needed this summer to support Ukraine against the war waged 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.”
They secured an agreement from Schumer, which he read on the floor, saying the debt ceiling deal “does nothing” to limit the Senate’s ability to approve other emergency supplemental funds for national security, including for Ukraine, or for aid to disasters and other matters of national importance.
For weeks, negotiators toiled late into the night to strike a deal with the White House, and for days McCarthy worked to win support among skeptics.
Tensions had risen in the House of Representatives the night before as far-right Republicans rejected the deal. Ominously, the Conservatives have warned they are likely to try to oust McCarthy on the issue.
But Biden and McCarthy cobbled together a bipartisan coalition, with Democrats securing passage by a solid 314-117 vote. In all, 71 House Republicans broke with McCarthy to reject the deal.
“We did really well,” McCarthy, California, said afterward.
As for the displeasure of Republicans who said the spending caps didn’t go far enough, McCarthy said it was just a “first step.”
The White House immediately turned its attention to the Senate, with its top staff making phone calls to individual senators.
Democrats also had complaints, decrying new work requirements for older Americans, those 50-54, in the food assistance program, changes to the landmark National Environmental Policy Act and approval of the controversial Mountain Valley natural gas pipeline project. according to which they are not helpful in combating climate change.
The nonpartisan Congressional Budget Office said the spending limits in the package would reduce deficits by $1.5 trillion over the decade, a key goal for Republicans trying to curb the debt.
In a surprise that complicated Republican support, however, the CBO said its drive to impose work requirements on older Americans receiving food stamps would ultimately increase spending by $2.1 billion over the time period. That’s because the final deal exempts veterans and homeless people, expanding the food stamp rolls by 78,000 people a month, the CBO said.
AP White House correspondent Zeke Miller contributed to this report.