Congress okays debt ceiling increase after Biden’s ‘hostage’ negotiation

A potential default crisis was averted after the compromise debt ceiling deal forged by President Joe Biden and House Speaker Kevin McCarthy passed by a large, bipartisan margin and was signed into law.

The final tally in the House was 314-117, and it was passed in the Senate by a 63-36 margin, even though the legislation makes drastic spending cuts and raises the limit of how much money the federal government can borrow to pay its outstanding bills for the next two years.

Every representative in the New Jersey delegation except Congressman Jeff VanDrew voted to approve the spending cuts and debt ceiling hike. VanDrew was one of 71 GOP members who voted against the measure.

A majority of Senate Republicans, 31 senators, voted against the debt ceiling bill, while just 17 GOP senators supported it. Only four Democrats and Vermont independent Sen. Bernie Sanders voted against the bill, while the other 46 members of the Democratic caucus voted for it.

The legislation must clear the Senate and become law before Monday — the day the government would default on its debt without an extended borrowing cap.

Senate Majority Leader Charles E. Schumer said that the chamber would stay in session until it sends the bill to Biden and he urged his colleagues not to make changes to the legislation, which would send it back to the House.

“Time is a luxury the Senate does not have if we want to prevent default,” Schumer said during floor remarks. “There is no good reason, none, to bring this process down to the wire. … I hope we see nothing even approaching brinksmanship. The country cannot afford that now.”

Senate Minority Leader Mitch McConnell has also urged colleagues to act before Monday, when the nation will no longer be able to pay its bills.

Sen. Richard J. Durbin, the majority whip, said he expects the bill will pass Thursday night or Friday, but a handful of senators are hoping to add amendments to the legislation that could slow the process.

Some of those lawmakers have expressed a desire for deeper spending cuts, an increase in defense spending and the removal of a provision that would fast-track a controversial pipeline that would carry natural gas across West Virginia and Virginia.

The debt ceiling is a restriction Congress has put on how much money the federal government can borrow to pay its bills, which has been in place since 1917.

Because the government usually spends more than it takes in, Congress needs to raise the debt ceiling fairly frequently to pay for its operations sort of like a credit card bill.

The driving force behind the turbo votes was simple: The Treasury Department’s June 5 deadline for raising or suspending the debt ceiling was just four days away.

Treasury Secretary Janet Yellen believed the government would have been unable to meet its debt obligation after Monday unless Congress voted to raise the debt limit.

Following the Senate vote, Yellen praised the legislation, saying it “protects the full faith and credit of the United States and preserves our financial leadership, which is critical to our economic growth and stability.”

Investors and market analysts have watched the monthlong debt ceiling drama play out with increasing apprehension, as the clock ticked down to the final weeks before a potential U.S. debt default, with still no deal.

In a statement, Moody’s said that the resolution to the debt ceiling crisis was in line with its expectation, and it was not considering a downgrade of U.S. debt.

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