The agreement on the debt ceiling passes a key stage in the Lower House

First modification: 05/31/2023 – 14:06Last modification: 06/01/2023 – 04:46

The bill, approved with 314 votes in favor and 117 against in the divided House, suspends the debt limit or “ceiling” on federal debt until 2025. It will now go to the Senate, where Biden’s Democrats are in the majority.

This is a “decisive step,” Biden celebrated, given just five days before the box of the world’s largest economy begins to falter on June 5, according to the US Treasury.

“Passing the Fiscal Responsibility Act is a crucial first step in getting America back on track,” said House Republican Leader Kevin McCarthy.

“He does what is responsible for our children, what is possible in a divided government, and what our principles and promises demand,” he added.

The United States risks a default or cessation of payments on its obligations, something unprecedented that can have catastrophic consequences for the economy.

On Tuesday, the House Rules Committee gave a first indication of the expected trend in voting on the bill, seven votes to six, with two Republicans and four Democrats against.

McCarthy supporters had spent the past few hours frantically seeking votes, while top Democrats vowed their members would put the nation’s finances above the temptation to hurt the opposition.

Chuck Schumer, leader of the Democrats in the Senate, warned before the vote in the House of Representatives that “the consequences of missing the deadlines would reverberate throughout the world and would take years to recover from them.”

“Remember, a default would almost certainly trigger another recession, skyrocket costs, kill millions of jobs: hard-working people thrown out of the job market through no fault of their own.”

– Cuts –

The vote follows weeks of hard bargaining between Biden and McCarthy, with Democrats accusing Republicans of holding the US economy “hostage” by insisting on spending cuts to go along with raising the debt limit.

McCarthy acknowledged before the vote that he would not achieve unanimity, but was optimistic that he would achieve the “biggest” budget cuts in history, he told reporters.

On their side, the Democratic leaders, despite the cuts to the government budget, promised to contribute the votes that would be missing.

House Democrats will vote “not to default the country. Period,” declared their boss, Hakeem Jeffries.

Biden, who visits Colorado on Wednesday night, hoped the text would pass the first vote before he arrived in that western state. On Tuesday he had “firmly” called on lawmakers to sign it into law.

“Let’s keep moving forward in meeting our obligations and build the most powerful economy in human history,” the president said on Twitter.

The bill suspends the debt ceiling until 2025, long enough to get through the next 2024 presidential election without a repeat of the tussle.

In exchange, some expenses are limited in order to keep them stable -except for military expenses- in 2024 and limits their increase to 1% for 2025.

It also provides for a reduction of 10,000 million dollars in the funds assigned to the treasury to modernize and intensify controls.

McCarthy’s office further explained that the agreement provides for the recovery of “billions of dollars of covid funds that were not spent” on the pandemic, without giving further details.

One of the points of contention includes modifications to the conditions to benefit from some social assistance, such as the increase in the working age from 49 to 54 years for adults without children who aspire to food assistance, but eliminates this requirement for veterans of war and homeless