On May 31, 2023, the U.S. House of Representatives voted along bipartisan lines by a margin of 314 to 117 to raise the debt ceiling. For the past few months, the looming deadline to raise the debt ceiling has been one of the most urgent matters before Congress. Negotiations stalled between President Biden and House Speaker Kevin McCarthy as the months rolled on, stirring up anxiety on Capitol Hill. Not reaching an agreement before the U.S. government ran out of money to pay its bills would have dire consequences domestically, with important federal programs like veterans’ services and benefits, Social Security, and Medicare potentially being affected by the U.S. defaulting on its debt. Global markets and overall confidence in the U.S. dollar would likely be impacted, as well.
While the bill has passed the House, it still must pass the Senate, where its fate is less clear. (The Senate had not voted prior to MONTROSE STAR going to press.)
Some concessions that President Biden agreed to include rolling back money involved in COVID relief packages that haven’t been spent yet, and conceding to caps on federal spending for the next two years; essentially, there wouldn’t be any immediate spending cuts, but there would be limits on spending moving forward with the exception of military spending and spending on veterans’ care, where spending will be increased. Part of the deal between President Biden and Speaker McCarthy is rolling back roughly $10 billion of the $80 billion that was approved by Congress to bolster the IRS and increase the size of its staff to crack down on the wealthy who have avoided paying taxes, as well as ending the pause on student loan payments that have been in place since the start of the pandemic. Americans with student loan debt will likely have to resume payments on their student loans by the end of the summer.
U.S. Treasury Secretary Janet Yellen warned that the government would run out of money to pay its bills by June 5, making it imperative that the Senate acts quickly on the deal that has passed the House. There are facets of the deal that upset both parties: Republicans did not get wins on many deep cuts to spending they’d hoped to see, and Democrats had to concede to issues such as work requirements being put in place for adults aged 50 to 54 for food stamps. Previously, there were work requirements for adults aged 18 to 49, though, on the flip side, food stamp access has been expanded for veterans and for the homeless. There is likely not enough time to go back to the drawing board should the Senate fail to pass the debt ceiling legislation, so the odds of it passing in the Senate are likely.
Ultimately, the debt ceiling has been raised over 100 times since World War II. Should legislation not pass and the U.S. default on its debts, it would be a historic break from precedence.