US avoids default: Senate passes debt ceiling bill

Congress United States NFTs


  • The US Senate passed a bill extending the debt ceiling for two more years, avoiding a possible default.
  • The law, negotiated by Biden and House Speaker Kevin McCarthy, keeps federal spending constant through 2025 and increases the nation’s borrowing limit.
  • Despite concerns from both sides of the political spectrum, the law passed, securing US economic backing and averting a crisis.

The Senate has voted in favor of a bill that extends the debt ceiling for two more years, sending the legislation to President Joe Biden’s desk just days before the United States is likely to run out of money to pay its bills.

The final vote was 63 to 36. There were 17 Republicans and four Democrats who opposed the law. The House approved the legislation by a vote of 314 to 117 on Wednesday night.

Congressional approval keeps the faith and credit of the United States off the negotiating table until the next presidential election and provides markets with a respite on an issue that regularly threatens economic chaos.

The concessions needed to get the deal done proved unpopular with certain members on both sides of the aisle, complicating efforts to pass legislation in Congress before a debt default. Treasury Secretary Janet Yellen warned that the default could happen next Monday.

The cornerstone of the deal negotiated by Biden and House Speaker Kevin McCarthy is a cap on federal spending. It keeps spending constant for 2024 and imposes new limits for 2025 without affecting Social Security, Medicare, or the military. In exchange, the country’s borrowing limit is increased until January 2025.

The law also increases the labor requirements to be able to access food assistance, thus encouraging the search for employment. This move was not well received by progressive Democrats.

Some House Republicans wanted the spending cuts to go deeper, as proposed in a separate bill passed by GOP lawmakers in April. Senate Republicans had a different concern: that the law would not adequately fund the military.

The law does provide for a 3% increase in defense spending for fiscal year 2024 and a 1% increase in 2025, but Republican Senator Susan Collins pointed out that the 1% increase was actually a decrease when taken into account. account for the rate of inflation.

Majority Leader Chuck Schumer had to maneuver around those concerns and votes on a series of 11 amendments, including one from Virginia Democratic Sen. Tim Kaine who opposed a natural gas pipeline project from West Virginia. through your state.

If either of those amendments had passed, the law would have had to go back to the House.

White House staff also called the senators individually on Thursday. His legislative affairs team contacted every Democratic senator’s office about the vote. 

“We can’t send anything back to the House,” Schumer told reporters Thursday. “That would imply a risk of default, plain and simple. ” The House voted against all 11 amendments before passing the bill and sending it to Biden’s desk.

Later, once he was sure the bill would receive enough votes, Schumer said: “America can breathe a sigh of relief because we are avoiding default