The Senate passed legislation negotiated by President Joe Biden and Speaker Kevin McCarthy (R-CA) to suspend the debt ceiling and set federal spending limits with just enough support to pull the nation back from the brink of economic catastrophe days from Monday’s deadline when the Treasury has said the United States will start running short of cash to pay its bills.
The Senate passed the bill 63-36 despite defections among liberal and conservative senators. Those on both sides of the aisle were unhappy with the overall agreement. A group of Republican defense hawks raised objections to Pentagon funding levels that they said were too low. Progressive discontent was also evident too, with several objecting to the new work requirements for older people in the food aid program, changes to the National Environmental Policy Act, and approval of the Mountain Valley Pipeline natural gas project.
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Some last-minute drama unfolded Thursday afternoon ahead of the final passage. One issue was the budget deal’s defense spending number, which would lock in defense spending to $886 billion over the next two years. Spending on defense and nondefense will be slashed by 1% if Congress is unable to pass a comprehensive spending bill by the end of the year.
Sen. Lindsey Graham (R-SC) and some other defense hawks threatened to stall the bill past the Monday “X-date” if Senate Majority Leader Chuck Schumer (D-NY) did not commit to a supplemental defense funding bill to beef up spending despite it reducing the savings Republicans had sought to achieve through the deal. Sen. Susan Collins (R-ME), the ranking Republican on the Senate Appropriations Committee, demanded a guarantee that all 12 appropriations bills would be brought to the floor to avoid the 1% across-the-board cut.
Leadership relented, promising Graham his desired supplemental vote and agreeing to 10-minute votes on the 12 bills.
Schumer took a victory lap at a press conference following passage of the bill, saying that while “of course nobody got everything they wanted,” the bill “prevented a catastrophic default that would have decimated our economy.”
The bill also “preserves the lion’s share of the historic investments we’ve made to grow our economy, fix our infrastructure, make the us more competitive on the world stage, which the Republican Caucus in the House seemed intent on tearing down,” the majority leader said. He added that the Senate “knew we needed to come together for a solution like the one that passed tonight. And so I’m happy to stand here passing this critical legislation to support our families, preserve vital programs, and most importantly, avoid catastrophic defaults.”
After driving the legislative agenda over the last two years, the Senate took a back seat and left the negotiation to Biden and McCarthy. As a result, senators had little to no influence over the final deal and were forced to approve legislation they had no role in brokering, which led to growing frustration on both sides of the aisle.
“I will never let this happen again as long as I’m here, to let people negotiate behind closed doors and not tell me what they are doing on defense. I blame myself for not being more involved and more active,” Graham said during a speech on the Senate floor on Thursday afternoon. “In my wildest dreams, I never believed that the Republican Party would take the Biden budget that they’ve attacked for a year and celebrate it as fully funding.”
Senators unhappy with the perceived deficiencies of the bill put up a dozen amendments that adjust spending levels, remove the pipeline approval, and more. None were approved.
The bill suspends the federal government’s borrowing limit through Jan. 1, 2025, allowing lawmakers and the White House to bypass the politically risky issue until after the November 2024 presidential election. Additionally, it caps some government spending over the next two years, claws back unused COVID-19 funds, expands work requirements for food aid programs, reduces some funding for IRS enforcement, and speeds up the permitting process of new energy projects.
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The deal was struck with the aim of gaining support from both sides. It allowed Republicans to insist on several policy changes and to say they succeeded in reducing some federal spending. Democrats were able to keep recent legislation on clean energy, healthcare, and infrastructure intact while also allowing them to say most domestic programs were spared from severe cuts.
The nonpartisan Congressional Budget Office said the spending cuts in the bill would reduce deficits by $1.5 trillion over a decade, a goal for many Republicans looking to curb the debt.
