US House Passes Debt Bill, Faces Biden Veto

The Republican-led House of Representatives passed a bill that would increase the US federal debt ceiling by $31.4 trillion, in exchange for cutting government spendingincluding programs championed by Democratic President Joe Biden.

Passed by a party-line vote of 217 to 215, with four Republicans breaking ranks, the bill now heads to the Democratic-controlled Senate, where it stands little chance of passing. Biden has already threatened to veto the bill, which includes spending cuts he previously called “irresponsible.”

“In our history, we have never defaulted on our debt or defaulted on our bills,” White House press secretary Karine Jean-Pierre said in a post-vote statement.

He called on Republicans in Congress to “assure the full faith and credit of the United States” by raising the debt ceiling “without conditions.”

“President Biden will never force working-class and middle-class families to shoulder the burden of tax cuts for the very wealthy the way this bill does. The president has made it clear that this bill has no chance of becoming law,” he wrote.

But the bill’s success in the lower house of Congress on Wednesday marks a significant, if narrow, victory for House Speaker Kevin McCarthywhile leaning towards negotiating with the Biden administration on federal spending.

“Democrats need to do their job. The president can no longer ignore by not negotiating,” McCarthy said at a post-vote news conference. “We raised the debt limit. We have sent it to the Senate. We have done our job, the only body here that has done theirs.”

In fact, Wednesday’s 320-page bill would raise the debt ceiling by $1.5 trillion. But it would also limit public spending to levels set in fiscal year 2022, a proposal that critics say would force massive cuts in federal programs as costs rise with inflation.

The bill would also rescind unspent COVID-19 relief money, as well as a nearly $71 billion funding increase for the Internal Revenue Service (IRS), the U.S. tax-collecting body.

However, the Congressional Budget Office has estimated that the additional funds would allow the IRS to “increase revenue by approximately $200 billion” over the next 10 years.

In addition, the bill would increase the work requirements for recipients of government safety net programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP), commonly called food stamps.

Also in the spotlight of the bill are Biden’s national platform signature policies. It would block Biden’s student loan relief initiative and repeal tax breaks for renewable energy production that Biden signed into law last year, as part of the Inflation Reduction Act.

The United States has never defaulted on its debt, and raising the debt limit is a fairly regular, albeit important, task.

The Treasury Department estimates that Congress raised, extended or revised the debt ceiling in 78 separate instances, including 49 times under Republican presidents and 29 times under Democratic presidents.

But in recent years, the debt ceiling debate has intensified, with Republicans pushing to cut federal spending in order to achieve a balanced budget. Democrats, meanwhile, have largely defended spending on social programs and have instead called for tax increases for the wealthy.

On Tuesday, Treasury Secretary Janet Yellen said that a US debt default could lead to a “economic catastrophe” for the USA

Economists warn that a default could result in a lower credit rating for the country, which could raise interest rates and make lending more difficult. It could also cause a recession in the economy and leave federal workers and Social Security recipients without pay.

“Solutions to the debt crisis must be serious, not partisan. But this bill brings us closer to default by mandating partisan policies that will never pass the Senate,” Democratic Rep. Jimmy Panetta said in his speech on the House floor Wednesday.

Meanwhile, Texas Rep. Jodey Arrington called on her fellow Republicans to unite behind the bill.

“You are going to listen to a number of vulnerable people, communities, who get federal funds,” he said in his remarks. “But I bet you won’t hear about the most vulnerable group of people in this country, and that’s the next generation of Americans who will inherit $31 trillion in debt, the highest levels of indebtedness in our nation’s history.”