Raises Debt Limit Until January 1, 2025
The U.S. Senate passed the bill to raise the debt limit late Thursday by a vote of 63-37 after rapid consideration of a series of amendments, none of which passed. Passage came with only 17 Republican votes and only after public assurances by Senate Majority Leader Schumer that a defense supplemental would be in order later this year to address the funding needed for Ukraine, as well as potential domestic needs including funding for natural disasters and the fentanyl crisis. President Biden is expected to sign the measure as early as today and address the nation from the Oval office this evening. After months of tense standoff between House Republicans and the White House, the deal that was reached:
- Raises the debt limit through January 1, 2025
- Enacts two years spending limits followed by additional years of targeted but not enforceable savings
- Imposes work requirements for recipients of some but not all federal social programs
- Implements limited energy project permitting reforms
- Rescinds some unspent COVID funds
- Repeals funding of new IRS agents this fiscal year
The House voted to pass the bill late Wednesday by a vote of 314-117. Speaker McCarthy secured almost two-thirds of his own Republican Conference in support of the measure, but was also aided by 165 Democrat votes to pass the measure in the House.
The debt deal is expected to bring some much-needed stability to U.S. and global financial markets, and for purposes of the remaining Congressional agenda for the year, the finalized deal will bring certainty to spending limits for both domestic and defense discretionary spending that will allow the annual appropriations process to proceed for FY2024. We anticipate a busy June and July mark-up season in both the House and Senate Appropriations Committees, so stay tuned for mark-up updates from your WSW team members on each of the annual appropriations bills and outcomes on your specific requests.
In addition, there is a backlog of legislative and investigative items that have been held up due to work on the debt limit, so expect the June and July calendars to quickly fill up with Congressional action on those items as well. These will include action on the annual National Defense Authorization Act (NDAA), work toward the reauthorization of the Farm Bill, and continued action on competition with China as well as work on other priorities including on emergent issues of AI and data privacy, possible banking reform, high profile investigations planned by House Republicans, and ongoing efforts by the Biden Administration to tout and implement prior legislative victories in the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) that were untouched by the debt deal. This week the Senate also acted to stop the President’s planned student aid relief but failed to reach a veto-proof majority, though this same policy is pending before the Supreme Court for review and a ruling is expected soon. Last but not least, we’ll be watching as more contenders announce their entry into the 2024 Presidential race.
