US debt ceiling bill set for tight vote in House
The US House of Representatives is due to vote on Thursday on a bill to lift the government’s $31.4 trillion debt ceiling, a critical step to avoid a destabilising default that could come early next week without congressional action.
Republicans control the House by a narrow 222-213 majority, but the bipartisan deal will need support from both Speaker Kevin McCarthy’s Republicans and President Joe Biden’s Democrats to pass, as members of both parties object to significant parts of the bill.
McCarthy predicted that the evening vote would succeed, telling reporters, “It’s going to become law.”
Biden underlined the stakes of failure, saying on Twitter, “Our bipartisan budget agreement prevents the worst possible crisis: a default for the first time in our nation’s history – an economic recession, retirement accounts devastated, and millions of jobs lost.”
Wall Street’s main indexes opened modestly lower on Wednesday as investors awaited the vote’s outcome.
The House Rules Committee late on Tuesday, in the first procedural vote on the contentious legislation, cleared the measure for debate in the full House.
The committee voted 7-6 to advance the bipartisan deal, with two far-right Republicans in opposition, along with all four Democrats.
The solid Democratic opposition is not necessarily indicative of how the party would vote on the bill itself.
The legislation would suspend the US debt limit through January 1, 2025, allowing Biden and lawmakers to set aside the politically risky issue until after the November 2024 presidential election.
It would also cap some government spending over the next two years, speed up the permitting process for some energy projects, claw back unused Covid-19 funds, and expand work requirements for food aid programs to additional recipients.
The Treasury Department has warned that it will not be able to cover all the government’s obligations by Monday if Congress does not raise the limit.
A successful House vote would send the bill to the Senate, where debate and voting could stretch into the weekend, especially if any one of the 100 senators try to slow its passage.