After the intense discussion about the debt ceiling limit, the US House of Representatives voted overwhelmingly on the new debt ceiling bill. The debt ceiling has become a significant concern for the economy of the US and its people. Here are all the details.
What is the House Vote on Debt Ceiling Bill?
The House of Representatives voted on the debt ceiling bill to suspend the limit on Wednesday, May 31, 2023. According to the Clerk of the United States House of Representatives, the bill passed by a vote of 314 in favor and 117 against the bill. This bill and approval will now go to the Senate for consideration.
Joe Biden on his Twitter account mentioned “Tonight, the House took a critical step forward to prevent a first-ever default and protect our country’s hard-earned and historic economic recovery.”
The bill passed just five days ahead of the deadline that was set by the Treasury mentioned in its letter to House Speaker Kevin McCarthy that it will run out of funds on June 5, 2023, if the debt limit wasn’t increased or suspended. The letter also stated that the Treasury would have to take extraordinary measures if the funds run out.
Later on May 31, 2023, the Department of Treasury announced the list of extraordinary measures it will be taking to suffice the debt owed by the US government.
This is what was stated, “Secretaries of the Treasury in both Republican and Democratic administrations have exercised their authority to take certain extraordinary measures in order to prevent the United States from defaulting on its obligations as Congress deliberated on increasing the debt limit.”
What is the Debt Ceiling Deal?
In May 2023, the United States government was reaching its debt ceiling. If the debt ceiling limit was not raised, the government would have been forced to default on its debt. This would have had a devastating impact on the economy, as it would have led to a loss of confidence in the US government and a rise in interest rates.
To prevent a default, President Biden and House Speaker Kevin McCarthy reached a compromise on May 27, 2023. The compromise reached a Bipartisan Budget Agreement where no one was completely satisfied with the terms.
The compromise led to a new bill that requests to suspend the US debt limit till January 1, 2025. This will allow the government to continue borrowing money and paying its bills.
What lies ahead?
The US debt ceiling bill reaches the Senate where it is expected to face more backlash. Republicans in the Senate have been more resistant to raising the debt ceiling, and it is unclear whether they will be willing to support the bill. The debt bill is a budget bill requiring the Senate to rely on reconciliation.
Mike Lee, a Republican Senator, has mentioned in his letter to Senate Majority Leader Chuck Schumer that he and other 43 senators will not consider any bill that raises the debt amount.
Here is what the letter reads “As such, we will not be voting for cloture on any bill that raises the debt ceiling without substantive spending and budget reforms”
Under reconciliation, the Senate passes a budget law with a majority vote and it requires 60 votes. Democrats do not have a 60-vote majority in the Senate, so they will need to get at least 10 Republicans to vote for the bill in order to pass it.
However, it is possible that some Republicans may be willing to vote for the bill in order to avoid a default on the national debt.
To conclude, if the Senate does not pass the debt ceiling bill, the government will be forced to default on its debt. This will create a devastating impact on the economy, and it is something that everyone wants to avoid. It is therefore possible that both Democrats and Republicans will compromise and reach a decision on the debt ceiling in the Senate.