Senate PASSES bill to suspend debt limit – Biden-McCarthy deal heads to president’s desk

The Senate voted Thursday night to send the House-approved debt ceiling bill to President Biden’s office.

The final vote was 63-36, with one Senator, Bill Hagerty, R-Tenn., not voting.

Most of the “no” votes came from Republicans, but some progressive Democrats also opposed the deal.

The Senate went through a rapid series of 11 amendment votes, all of which failed. If they hadn’t, the House would have to reinstate the bill in its amended version, with just three days to go before the Treasury has said the US will run out of money to pay its bills by June 5.

In an effort to appease defensive hawks, Majority Leader Chuck Schumer and Minority Leader Mitch McConnell agreed to bolster defense funds through an additional defense emergency bill. The leaders also pledged to approve all 12 credit bills to avoid spending freezes.

Without the agreement, which required the cooperation of all 100 senators, the final vote on the bill could have been pushed back next week — past June 5, the date the Treasury has said the country has run out of money.

The deal, which suspends the debt ceiling until January 1, 2025, includes a defense spending ceiling for fiscal 2024 of $886 billion — a three percent increase from 2023 that some defense hawks in the Senate say will amount to a reduction if inflation is included in. It allows for a one percent increase to $895 billion by 2025.

Conservatives had objected to the plan’s defense spending, which they say is inadequate.

“This bill poses a deadly risk to our national security,” Sen. Tom Cotton, R-Ark., said in the Senate Thursday.

No one was more furious about the deal than defensive hawk Senator Lindsey Graham.

“To my house colleagues – I can’t believe you did this,” said Graham, RS.C. Thursday.

“Don’t tell me that a defense budget $42 billion below inflation fully funds the military,” Graham said.

He called the deal “really stupid” and said it was the most “ill-conceived idea” since the 2011 deal that led to budget cuts. “The people who negotiated this, I wouldn’t let them buy me a car.”

Even the top senate GOP owner Susan Collins called the defense budget a “completely inadequate figure,” and GOP Senator Mike Rounds, RS.D., demanded that it be increased in the appropriations process.

A member of the Senate GOP leadership — Senator John Barrasso, number three Republican and conference chairman — voted against the bill.

“This is a missed opportunity to bring government growth under control and put our country on a sustainable fiscal path,” he said in a statement.

A member of the Democratic leadership – Senator Elizabeth Warren – vice chairman of the Democratic conference, also opposed the deal.

Graham previously said he would hold up the bill for as long as possible until changes were made.

“We’ll stay here until Tuesday until I get commitments to fix some of these issues.”

“I want a commitment from the leaders of this body that we will not pull the plug on Ukraine,” Graham said. “I want a commitment that we will have a replenishment”

Graham has proposed that the Senate include additional Ukraine-targeted defense spending bills as a way to get around the $886 billion defense ceiling.

Aid from Ukraine, if classified as emergency funding, would not count against that limit. Congress has previously appropriated additional funding bills for Ukraine, including one that President Biden signed into law in May 2022.

Graham has said he plans to offer amendments to the bill that would remove defense spending caps and reiterate US support for Ukraine.

“I want a commitment from the leaders of this body that we will not pull the plug on Ukraine,” says Graham. “I want a commitment that we’ll have a replenishment.”

Except the commitment for additional defense funding, all other demands. were shot down in amendment votes in exchange for the deal.

Democratic Sen. Tim Kaine, D-Va., demanded a vote on his amendment to remove the approval of the Mountain Valley Pipeline, Sen. Joe Manchin’s favorite project, from the deal.

Senator Mike Lee, R-Utah, had promised to vote “strongly” against the bill.

“This deal begs the question, with Republicans like this, who needs Democrats?” Lee asked, accusing the House GOP leadership of “not even pretending to negotiate in good faith.”

Lee said he would introduce an amendment to make exceptions to the requirements for working with food stamps.

While there are already work requirements for most able-bodied adults between the ages of 18 and 49, the bill raises the age limit to 54, but has an expiration date and would reduce the age to 49 by 2030.

The agreement would also make it harder for states to waive work requirements for SNAP by lowering the number of state-level exemptions allowed each month.

Democrats also won some new expanded benefits for veterans, the homeless and youth aging out of foster care. And in a last-minute snafu for Republicans, a Congressional Budget Office (CBO) report actually said the amount spent on SNAP would increase by $2.1 billion given the new waivers.

Lee also called the bill’s pay-as-you-go provisions — which would require the Biden administration to offset all costs of new executive actions — “completely toothless.”

The so-called “paygo” requirement can be waived by Office of Management and Budget Director Shalanda Young if she deems it “necessary.”

The deal also stipulated that student loan payments would resume on August 29, but did not end President Biden’s student loan forgiveness program as Republicans had hoped.

The deal cuts some $21.4 billion from the IRS, which received another $80 billion in funding from the Democrats’ last congress, but only immediately claws back $1.4 billion. White House officials said Biden agreed to move $10 billion from the IRS to other funding priorities in fiscal year 2024 and another $10 billion in fiscal year 2025.

It also allows Congress to reclaim about $30 billion in unused Covid-19 aid funds, but it remains to be seen whether states will actually return the money or find ways to spend it.

It also leaves non-defense discretionary spending unchanged in 2024 and allows for a one percent increase in 2025 – which essentially amounts to spending cuts since inflation is not taken into account.

The nonpartisan Congressional Budget Office has estimated that the bill would reduce deficits by $1.5 trillion over the next decade compared to previous projections, but some informal estimates say it could push the debt up to $35 trillion.