Biden and McCarthy’s debt ceiling deal expected to go to full House vote today – live

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US debt ceiling clears key hurdle in the House

The bipartisan agreement to raise the $31.4trn US debt ceiling forged by President Joe Biden and House Speaker Kevin McCarthy is set for a vote in the House of Representatives on Wednesday.

The bill, which will also implement new federal spending cuts, cleared an important hurdle on Tuesday when the House Rules Committee voted 7-6 to approve it, allowing debate by the full chamber.

The narrowness of that outcome, which saw two Republicans break ranks to oppose it, underscored the need for Democrats to help it pass the House, where Republicans hold a slim majority of 222 to 213.

A number of influential lawmakers on both sides, including Alexandria Ocasio-Cortez, Lauren Boebert and Matt Gaetz have already signalled their opposition, raising the stakes.

House passage would send the bill to the Senate, with congressional approval required before Monday 5 June, when the Treasury Department could run out of funds to pay its debts for the first time in American history.

Mr Biden and Mr McCarthy have expressed confidence they will get enough votes to prevail but, should they fail, the Treasury might not be able to cover its payments, or be forced to prioritise, triggering economic chaos.

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What’s in the cliffhanger deal?

Weeks of sniping back-and-forth between the White House and the Republican majority in the House of Representatives finally yielded a deal: America will not default on its debt obligations, should Congress act and pass the legislation this week.

But what does the agreement actually contain?

John Bowden has this overview.

Joe Sommerlad31 May 2023 12:30

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Debt limit agreement clears first hurdle despite Republican anger

The House Rules Committee voted 7-6 yesterday to advance the legislation that codifies the bipartisan agreement struck between House Speaker Kevin McCarthy’s team and negotiators from President Joe Biden’s administration.

The 99-page bill passed after an hours-long deliberation in the committee that included multiple amendment proposals.

The vote comes as Treasury secretary Janet Yellen warns that the United States will be unable to satisfy its debt obligations come 5 June without action.

Tuesday’s Rules Committee session was far from smooth, however, with many House Republicans raising objections, including members of the House Freedom Caucus who had previously opposed Mr McCarthy’s bid for speaker in January.

Eric Garcia has this report.

Joe Sommerlad31 May 2023 12:15

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Senate battle lying ahead should bill pass House

White House budget director Shalanda Young, who was one of President Biden’s lead negotiators, has urged Congress to pass the bill.

“I want to be clear: This agreement represents a compromise, which means no one gets everything that they want and hard choices had to be made,” Ms Young told a news conference.

A Senate vote could possibly stretch into the weekend if lawmakers in that chamber try to slow its passage.

At least one senator, Republican Mike Lee, has said he may try to do so, and other Republicans have also expressed discomfort with some aspects of the deal.

The bill would suspend the US debt limit through 1 January 2025, allowing Mr Biden and lawmakers to set aside the politically risky issue until after the November 2024 presidential election.

It would also cap some government spending over the next two years, speed up the permitting process for some energy projects, claw back unused Covid-19 funds, and introduce work requirements for food aid programs for some poor Americans.

In another win for Republicans, it would shift some funding away from the Internal Revenue Service, although the White House says that should not undercut tax enforcement.

Mr Biden can point to gains as well. The deal leaves his signature infrastructure and green-energy laws largely intact and the spending cuts and work requirements are far less than Republicans had sought.

Republicans have argued that steep spending cuts are necessary to curb the growth of the national debt, which at $31.4 trillion is roughly equal to the annual output of the economy.

Interest payments on that debt are projected to eat up a growing share of the budget as an ageing population pushes up health and retirement costs, according to government forecasts. The deal would not do anything to rein in those fast-growing programs.

Most of the savings would come by capping spending on domestic programs like housing, education, scientific research and other forms of “discretionary” spending. Military spending would be allowed to increase over the next two years.

The debt-ceiling standoff prompted ratings agencies to warn that they might downgrade US debt, which underpins the global financial system.

Joe Sommerlad31 May 2023 12:00

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House expected to vote on Biden and McCarthy’s debt ceiling deal

The bipartisan agreement to raise the $31.4trn US debt ceiling forged by President Joe Biden and House Speaker Kevin McCarthy is set for a vote in the House of Representatives on Wednesday.

The bill, which will also implement new federal spending cuts, cleared an important hurdle on Tuesday when the House Rules Committee voted 7-6 to approve the rules, allowing debate by the full chamber.

The narrowness of that outcome, which saw two Republicans break ranks to oppose it, underscored the need for Democrats to help pass the measure in the House, where Republicans hold a slim majority of 222 to 213.

House passage would send the bill to the Senate, with congressional approval required before Monday 5 June, when the Treasury Department could run out of funds to pay its debts for the first time in American history.

Mr Biden and Mr McCarthy have expressed confidence they will get enough votes to pass the 99-page bill into law before the deadline but, should they fail, the Treasury might not be able to cover its payments, or be forced to prioritise, triggering likely economic chaos.

The non-partisan budget scorekeeper for Congress on Tuesday said the legislation would reduce spending from its current projections by $1.5 trillion over 10 years beginning in 2024.

The Congressional Budget Office also said the measure, if enacted into law, would reduce interest on the public debt by $188 billion.

Mr McCarthy called the bill the “most conservative deal we’ve ever had.”

Nevertheless, some of the House’s most conservative Republicans who sought far deeper spending reductions were not persuaded and it was unclear how many Democrats Mr McCarthy will need to win Wednesday’s anticipated vote on passage.

All four Democrats on the Rules Committee voted against the bill, as they typically do on Republican-backed legislation. It was unclear whether that might influence other Democrats to do the same on Wednesday, even as Democratic minority leader Hakeem Jeffries said his party would provide the support Mr McCarthy needs.

Many Democrats in Congress did not want Mr Biden to engage in budget-cutting negotiations with Republicans until they lifted their hold on enacting a debt limit bill.

Joe Sommerlad31 May 2023 11:45

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Hello and welcome to The Independent’s live coverage of what is expected to be a busy day in Washington, DC, as the House of Representatives votes on the deal struck between President Joe Biden and House Speaker Kevin McCarthy to raise the $31.4 trillion US national debt ceiling and prevent the Treasury defaulting on its payments, triggering likely economic chaos.

Joe Sommerlad31 May 2023 11:29

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