Republicans approve raising debt ceiling, US closer to financial meltdown

The US House of Representatives narrowly passed a bill to increase the nation’s debt ceiling to $31.4 trillion on Wednesday, defying Democratic President Joe Biden by including sweeping spending cuts for the upcoming decade.

The largely partisan 217-215 vote marked a victory for House Speaker Kevin McCarthy, a Republican who hopes to lure Biden into spending cut talks even as the White House and congressional Democrats insist in an unconditional debt limit increase.

The Treasury Department could run out of ways to pay its bills in a matter of weeks if Congress doesn’t act, and financial markets are already showing warning signs. A stalemate in 2011 led to a downgrade of the government’s credit rating, raising financing costs and hurting investment.

“We’ve done our job,” a victorious McCarthy told reporters just after the vote. “The Republicans have raised the debt limit. You haven’t. Neither has Schumer,” McCarthy added, referring to Biden and the Senate’s top Democratic figure, Chuck Schumer.

McCarthy now faces a much more complex task in trying to negotiate a compromise with the Democrats without losing the support of some of his more conservative Republican colleagues.

McCarthy called on Biden to begin negotiations on a debt limit increase and spending cut bill and for the Senate to pass a House initiative or green light his own legislation.

The bill would increase Washington’s borrowing authority by $1.5 trillion or until March 31, whichever comes first, raising the specter of another round of negotiations during the 2024 presidential campaign.

The bill would cut spending to 2022 levels and then cap growth at 1% a year, repeal some tax incentives for renewable energy and toughen work requirements for some anti-poverty programs.

White House press secretary Karine Jean-Pierre said Biden would not approve such cuts.

“President Biden will never force the middle class and working families to bear the burden of tax cuts for the wealthiest, as this bill does!,” he said in a statement. “The president has made it clear that This bill has no chance of becoming law!”

Schumer told reporters that the House bill was “dead on arrival” in the Senate and that the Republican measure “only brings us dangerously close” to a historic US debt default that would rock markets and economies around the world. the world.

Earlier in the day, House Majority Leader Steve Scalise predicted in an interview that passage of the Republican debt limit bill would change “the whole dynamic” and put pressure on Democrats to participate in the negotiations.

Republicans were quick to praise McCarthy’s victory, which had been in doubt until the last moment.

“Now it shows that we can govern even with a five-member majority, and there’s been so much criticism that we couldn’t do this,” Rep. Michael McCaul said of the debt-ceiling vote. “We have shown the country that we can govern.”

Throughout the bill’s debate, Republicans portrayed Democrats as free spenders of taxpayer money, which they say has pushed the national debt into a danger zone.

Meanwhile, Democrats lamented the deep spending cuts the measure would bring to programs including health care for the poorest, Head Start education for preschoolers and a variety of other programs including airport security and law enforcement operations. the law.

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