House okays debt-limit deal

The bill sailed through in the House with a favourable 314-117 vote, relying on both Republicans and Democrats

- Siobhan Hughes

The House passed a sweeping bill that suspends the federal government's $31.4 trillion debt ceiling in exchange for spending cuts, as Republican Speaker Kevin McCarthy muscled through a deal struck with President Joe Biden to avert a looming government default.

The 314-117 vote relied on support from both Republicans and Democrats. Passage of the deal sends the measure to the Senate, where leaders have promised quick action, and Biden has said he is eager to sign the measure into law.

Treasury Secretary Janet Yellen has said the government could run out of the cash it needs on 5 June to pay its bills on time and warned of severe economic damage and market disruptions unless Congress acts.

The House vote marks the culmination of a hard-fought debate in the chamber, where Republicans were intent on using the debt ceiling as leverage to deeply cut deficit spending and roll back many of Biden's signature initiatives but ended up settling for more modest changes.

The outcome showed, for now, that McCarthy has the power to deliver high-stakes deals with Democrats while still keeping his job, and bolstered Biden's reputation as a deal maker who was willing to find a middle ground with Republicans.

Biden said he has "been clear that the only path forward is a bipartisan compromise that can earn the support of both parties. This agreement meets that test."

The bill, called the Fiscal Responsibility Act, would suspend the debt ceiling through 1 January 2025, putting off the next battle over the borrowing limit until after the presidential election. The deal trims some discretionary spending next fiscal year and imposes a 1% spending cap for fiscal 2025, but doesn't touch big parts of the budget including Social Security and Medicare. It also has provisions to speed up energy projects and impose new requirements for food assistance.