The Senate voted Thursday night to pass a bill that would extend the debt ceiling for two years and establish a two-year budget agreement on a broad bipartisan vote.
The vote was 63-36.
Having already cleared the House on Wednesday, it now goes to President Joe Biden, who is expected to sign it and avert an economically catastrophic debt default with mere days to spare before Monday's deadline.
The agreement was brokered by Biden, a Democrat, and House Speaker Kevin McCarthy, a Republican, after a lengthy stalemate and a frenzied few weeks of negotiations as the U.S. neared the cliff. Biden will address the nation on the bill at 7 p.m. ET Friday.
"America can breathe a sigh of relief. Because in this process we are avoiding default," said Senate Majority Leader Chuck Schumer, D-N.Y. "The consequences of default would be catastrophic."
Senate Minority Leader Mitch McConnell, R-Ky., championed the bill as "an urgent and important step in the right direction — for the health of our economy and the future of our country."
It means the U.S. will avert a potentially catastrophic default on its debt obligations, punting the issue until after the 2024 election.
- It also brings a legislative end to months of fiscal tension in Washington, as Republicans in Congress used the need to raise the debt ceiling as leverage to get President Biden to agree to budget cuts.
Senators voted 63-36 to pass the bill, with 46 Democrats and 17 Republicans voting for it.
- A group of 31 Republicans, mostly conservatives, voted against the bill, including Senate Republican Conference Chair John Barrasso (R-Wyo.).
- Five progressives also voted against it: Sens. Bernie Sanders (I-Vt.), John Fetterman (D-Pa.), Ed Markey (D-Mass.), Jeff Merkley (D-Ore.) and Elizabeth Warren (D-Mass.).
- Sen. Bill Hagerty (R-Tenn.), who was attending his son's graduation, was the lone senator who did not vote.
Biden said in a tweet Thursday night that senators from both parties had "voted to protect our hard-earned economic progress and prevent a first-ever default."
- "No one gets everything they want in a negotiation, but make no mistake: this bipartisan agreement is a big win for our economy and the American people," added Biden, who's due to address the nation on the matter at 7pm Friday ET.
- "Our work is far from finished, but I look forward to signing this bill into law as soon as possible and addressing the American people directly tomorrow."
Senate Majority Leader Chuck Schumer (D-N.Y.) said at a news conference late Thursday: "We've saved the country from the scourge of default. Even though there were some on the other side who ... wanted to lead us to default."
Meanwhile, Senate Minority Leader Mitch McConnell (R-Ky.) said in a statement on Thursday night that four months after House Speaker Kevin McCarthy (R-Calif.) "invited President Biden to begin negotiating a resolution to the looming debt crisis, an important step toward fiscal sanity will finally become law."
The Senate was able to forgo its usual days-long process for passing major legislation by reaching a time agreement in exchange for votes on 11 amendments, all of which failed.
- Schumer and McConnell mollified concerns from GOP defense hawks about insufficient Pentagon spending in the bill with a commitment to push a supplemental defense funding package.
- Beyond raising the debt ceiling, the bill, which was approved by the House on Wednesday, includes several provisions geared toward reducing the federal deficit:
- Spending: Keeps non-defense discretionary spending in the 2024 budget roughly steady at 2023 levels and caps growth in the 2025 budget at 1%.
- Defense: Codifies the Biden administration's request for $886 billion for the Pentagon, a roughly 3% increase.
- Supplemental Nutrition Assistance (SNAP): Expands food assistance work requirements to able-bodied adults until the age of 54, but exempts the homeless, veterans and some former foster youth. The work requirements phase in over three years and sunset in 2030.
- Temporary Assistance for Needy Families (TANF): Slightly reduces state grants for direct cash assistance to families in poverty.
- Permitting reform: Streamlines the environmental review process to speed up approval for new energy projects.
- PAYGO: Mandates the executive branch to offset significant expenditures with spending reductions ("pay-as-you-go"), but allows them to waive the requirement in certain cases.
- COVID aid: Rescinds roughly $27 billion in unspent COVID aid to public health, infrastructure and disaster relief programs, to be reallocated for n0n-defense discretionary spending.
The bill would reduce budget deficits by $1.5 trillion over the next 10 years, according to a report from the Congressional Budget Office.
- Counterintuitively, according to the CBO, the number of SNAP recipients would be increased by 78,000 because of the new exemptions, increasing spending on the program by $2.1 billion.