The US House of Representatives passed a debt limit bill prepared by President Joe Biden and Republican Rep. Kevin McCarthy to restrict government spending throughout the 2024 election year and stop potential destabilization because of default—the USA.
Lawmakers from both groups voted Wednesday night to sustain bills 314 to 117, transmitting the measure to the Senate for review before the deadline.
As Bloomberg reports, this vote will support Biden’s reputation as a pragmatic politician before beginning the re-election campaign. On the other hand, McCarthy can also reason that he successfully solved his first significant test as the head of the Republican caucus.
The deal won the approval of two-thirds of House Republicans, an important vote of confidence for McCarthy, whose slim majority within the party leaves him weak to challenges from aggrieved members. But the bill won more Democratic votes than Republicans, which conservative critics will employ to say McCarthy made a bad deal.
The result represented an uncommon instance of bipartisan agreement in the deeply divided landscape of Washington.
Biden, observing the vote on television, hailed the outcome in the House as “positive news for the American people and the economy.”
Most investors have considered that they have mostly prevented the danger of a US default. They are now focusing on other uncertainties likely to influence growth, such as another possible growth in interest rates by the Federal Reserve or a weakening of the Chinese economy.
Senate Is About to Receive a Deal
The debt bill aims to eliminate the risk of a future default crisis throughout the remainder of Biden’s term by temporarily suspending the debt ceiling until Jan. 1, 2025. In return, Democrats have decided to limit federal spending until the end of that period, presumably leading to cuts in government services regarding the current inflation rate of five percent per year.
The agreement now heads to the Senate, where approval is highly likely, and the only uncertainty is the timing. The vote on the measure could take place as soon as Thursday, just a few days before the June 5 deadline.
