". . . and having done all . . . stand firm." Eph. 6:13


Debt Limit Deal Passes U.S. Senate

June 2, 2023

The U.S. Senate voted 63-36 Thursday to pass the McCarthy-Biden debt ceiling deal, sending the legislation to the president’s desk ahead of the Monday deadline before the U.S. government would miss payments. As in the House, the bill passed by a wide margin, but with defections from both parties and more Democratic than Republican support.

The debt ceiling deal would suspend the debt ceiling until January 2025 and roughly maintain post-COVID spending levels. It would also repurpose approximately $30 billion in unspent funds from COVID stimulus packages, reform permitting, and tweak SNAP work requirements.

In the Senate, 46 Democrats and 18 Republicans voted for the bill, while five Democrats and 31 Republicans voted against it. In the House, 165 Democrats and 149 Republicans voted for the bill, while 46 Democrats and 71 Republicans opposed it.

The U.S. hit the debt ceiling on January 19, and Treasury Secretary Janet Yellen instituted “extraordinary measures” to avoid a default until Congress authorized further debt accumulation. Those extraordinary measures were set to run out on Monday. If the extraordinary measures ran out before Congress provided a solution, the U.S. government would fail to pay at least some of its bills on time. Although such a situation is unprecedented, analysts believe it would rattle financial markets, downgrade the U.S. government’s credit rating (which would raise borrowing costs), and have other cascading negative effects on the economy.

For months, President Biden refused to negotiate with House Republicans, demanding a “clean” bill to increase the debt ceiling without any budget cuts. He calculated in part that Speaker Kevin McCarthy (R-Calif.) would be unable to unite his party behind a single bill. In late April, the razor-thin House majority coalesced behind the Limit Save Grow Act, a conservative bill that would have saved $4 trillion over the next 10 years, forcing Biden to the negotiating table.

The eventual McCarthy-Biden deal would save only $1.5 trillion over the next 10 years (approximately $150 billion per year, compared to the additional $2 trillion the federal government has spent in every fiscal year since the COVID pandemic) and contained only watered-down versions of some of the conservative policies contained in the original. As a result, many House conservatives refused to back it, with some even threatening to sabotage McCarthy’s speakership.

Senate Republicans expressed a variety of concerns about the bill, with many protesting it contained inadequate defense spending, while others wanted to see deeper cuts to return non-defense spending to pre-COVID levels. “The budget shouldn’t shape our defense needs. Our defense needs have to shape our budget,” said Senator Tom Cotton (R-Ark.). Meanwhile, Senator Mike Lee (R-Utah) called the bill a “fake response to burdensome debt.”

Earlier this year, the Congressional Budget Office projected that by 2028 the U.S. government will pay more in interest on the debt than it will for national defense. A growing majority of the budget is spent on mandatory entitlement spending — Social Security, Medicare, and Medicaid — which was not on the negotiating table in the debt ceiling deal.

“The debt ceiling deal is absurd,” said Family Research Council President Tony Perkins. “It is not fiscally responsible to make emergency COVID spending levels the new baseline for federal budgets. Why fully fund unnecessary woke policies? We must course correct and return our federal budget to pre-pandemic spending levels.”

“America gave [Speaker Kevin McCarthy] one of three levers when it comes to the appropriation process. Americans gave us President Joe Biden and [Senate Majority Leader] Chuck Schumer to lead the Senate,” said Senator Roger Marshall (R-Kan.), who voted against the bill, on “Washington Watch.” “I hope America remembers this come the next election. Kevin did the best job he could, but I’m not satisfied.”

Joshua Arnold is a senior writer at The Washington Stand.