A bipartisan agreement on raising the debt ceiling and making budget cutbacks received final Senate approval late Thursday, preventing the United States from defaulting. President Joe Biden will now sign the agreement into law before the deadline, which is rapidly approaching.
Kevyn McCarthy, the speaker of the House, and Joe Biden reached a compromise plan that neither Republicans nor Democrats are pretty satisfied with.
However, after weeks of difficult budget discussions, the decision put off the contentious debt ceiling debate that threatened to destabilize the American and global economies until 2025, following the next presidential election.
Bipartisan support helped the Biden-McCarthy amendment pass the Senate with a vote of 63-36, reflecting the House’s previous day’s resounding victory.
As a result of the bill’s passing, according to Senate Majority Leader Chuck Schumer, “America can breathe a sigh of relief.”
He declared, “We are avoiding default.”
Washington needed to move quickly if it wanted to make the deadline following Monday when the Treasury warned that the United States would start running out of money to pay its obligations and risk a catastrophic default.
Raising the country’s current $31.4 trillion debt ceiling would allow Treasury to borrow money to pay down existing U.S. debts.
The debt ceiling struggle ultimately turned out to be a recurring high-stakes debate in Congress that McCarthy took on and was fueled by a hard-right House Republican majority that threatened the Democratic president with a new period of split government in Washington.
McCarthy forced Biden’s White House to the negotiation table to reach an agreement that imposed spending reductions to reduce the nation’s deficits by rejecting a once-routine vote to accept a debt limit increase without compromises.
Overall, the 99-page plan limits spending for the next two years suspends the debt ceiling until January 2025, and makes specific policy changes, such as adding new job requirements for senior citizens getting food assistance and approving a natural gas pipeline across the Appalachian Mountains, which many Democrats oppose.
It increases funding for the military and veterans, reduces new funding for IRS officers, and rejects Biden’s proposal to roll back tax incentives for corporations and the rich from the Trump administration to reduce the deficits in the country.
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Late on Wednesday, the House decisively adopted the plan, and Senate Republican leader Mitch McConnell indicated he wanted to ensure it became law as soon as possible.
McConnell boasted about his budget cutbacks on Thursday, saying, “The Senate has a chance to make that important progress a reality.”
Mainly having stayed out of the Biden-McCarthy negotiations, a few senators insisted on discussing their proposals to alter the deal.
Any amendments at this point would almost probably derail the compromise, thus, none were accepted.
Instead, senators dragged out rounds of voting into the wee hours of the morning, rejecting the many changes while making it plain which ones they preferred.
Democratic Senator Tim Kaine of Virginia sought to remove the extra expenditure cuts that conservative Republican senators wanted to include.
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