Debt ceiling news - live: Senate passes debt limit deal bill sending it to White House for Biden signature

The Senate has passed a bipartisan agreement forged by US president Joe Biden and House speaker Kevin McCarthy to raise the $31.4 trillion US debt ceiling after the deal survived a Republican rebellion in the House of Representatives.

The Fiscal Responsibility Act, which will also implement new federal spending cuts, cleared the lower chamber with 314 votes in favour and 117 against on Wednesday night.

The narrowness of its passage through the House was made possible through the support of Democrats, who stepped in to thwart a Republican rebellion that badly undermined Speaker McCarthy’s claims to control over his increasingly divided party.

On Thursday, the Senate rejected 11 proposed amendments before passing the bill 63 for to 36 against. Senate majority leader Chuck Schumer will now send the bill to President Biden’s desk for his signature.

Full congressional approval was required before Monday 5 June, when the Treasury Department was expected to run out of funds to pay its debts for the first time in American history.

Key Points

• Senate passes debt limit bill after marathon 11 amendment votes to avoid default

• Debt limit bill advances in House by vote of 314-117

• Kevin McCarthy ally says White House got ‘schooled’ in debt negotiations

• Does this deal mean the end of McCarthy’s speakership?

• What’s in the cliffhanger deal?

The debt limit vote signals the beginning of the end for Kevin McCarthy

09:00 , Eric Garcia

If House Speaker Kevin McCarthy has one defining trait, it’s his eagerness to please. He has used this acumen to compensate for his lack of policy wonkery and other skills associated with being an effective congressional leader.

When he led Republicans in California’s state legislature, he earned a reputation as someone who would keep his word with Democrats when the legislature needed to get a bill across the finish line.

When he came to Washington, one aide said he was “like your favorite fraternity brother” for his affability. And despite his dislike of Democrats’ investigation into the riot on January 6, last year, I overheard him talking with select committee member and then-Democratic congresswoman Stephanie Murphy about what type of dog to get for her family. He has cultivated relationships with California’s elite, befriending Elon Musk long before the Tesla executive shifted rightward, and serving as inspiration for Kevin Spacey’s character of Frank Underwood in House of Cards.

Read more:

The debt limit vote signals the beginning of the end for Kevin McCarthy

Senate passes GOP bill overturning student loan cancellation, teeing it up for Biden veto

08:00 , AP

A Republican measure overturning President Joe Biden‘s student loan cancellation plan passed the Senate on Thursday and now awaits an expected veto.

The vote was 52-46, with support from Democratic Sens. Joe Manchin of West Virginia and Jon Tester of Montana as well as Arizona Sen. Kyrsten Sinema, an independent. The resolution was approved last week by the GOP-controlled House by a 218-203 vote.

Biden has pledged to keep in place his commitment to cancel up to $20,000 in federal student loans for 43 million people. The legislation adds to Republican criticism of the plan, which was halted in November in response to lawsuits from conservative opponents.

The Supreme Court heard arguments in February in a challenge to Biden’s move, with the conservative majority seemingly ready to sink the plan. A decision is expected in the coming weeks.

Read more:

Senate passes GOP bill overturning student loan cancellation, teeing it up for Biden veto

Democrat who almost beat Lauren Boebert in 2022 blasts her for not voting on debt deal

07:00 , Gustaf Kilander

Winner and Loser: President Joe Biden

06:00 , Eric Garcia

The president had some wins and some losses. Right out the gate ahead of his State of the Union Address, he got Mr McCarthy and House Republicans to take cuts to Social Security and Medicare off the table. His student loan forgiveness program remains intact and only a small amount of money allocated to the Internal Revenue Service in the Inflation Reduction Act will be cut in the final bill. Many of the other climate aspects in the bill remain in place as well.

At the same time, Mr Biden wanted a clean debt limit increase, which he didn’t get and had to negotiate with the House. He also failed to make the case to the American public about the need for the United States to fulfill its debt obligations and the risks of defaulting on its debt.

Winner and Loser: House Speaker Kevin McCarthy

05:00 , Eric Garcia

The debt limit standoff was the California Republican’s first big test after a marathon 15 votes to earn the gavel in January. On one end, he moved the White House from its initial position of wanting a clean debt limit increase. He did so through an aggressive media and messaging strategy, often speaking to reporters both at the White House and again when he returned to the Hill. He put in place work requirements that Republicans have long wanted and dispatched two of his top negotiators. A majority of House Republicans also ultimately voted for the increase, meaning he did not break an internal House GOP rule.

But many conservatives rattled their sabres once negotiators announced they had reached a deal, such as the House Freedom Caucus, which includes many Republicans who had switched their votes in January after he made a series of side deals, many of them pertaining to the debt limit. And ultimately, 71 Republicans voted against the legislation, including some of his allies and more than just the rabble-rousers in the Freedom Caucus. He could face an internal rebellion in the coming months.

Full story: Senate passes debt limit bill after marathon 11 amendment votes to avoid default

04:00 , Oliver O'Connell

The Senate voted late on Thursday night to raise the debt limit and avoid allowing the United States to default on its debt for the first time in history after having an all-night marathon session of votes to assuage Republican concerns.

The legislation passed 63 to 36 after senators held 11 votes on amendments —10 from Republicans and 1 from Democrats — to address concerns about the bill.

Eric Garcia reports for The Independent from Capitol Hill.

Senate passes debt limit bill after marathon 11 amendment votes to avoid default

Senate passes bill to increase debt ceiling 63-36

03:55 , Oliver O'Connell

Final vote to increase debt limit underway

03:47 , Oliver O'Connell

The Senate vote to increase the debt limit is underway, with 60 votes needed.

All 11 amendments proposed by senators were rejected in a marathon voting session this evening.

Loser: Student debtors

03:15 , Eric Garcia

When Republicans initially passed the Limit, Save and Grow Act in April, it rolled back the Biden administration’s student loan cancellation. That ultimately did not end up in the final bill. But Republicans did get the White House to agree to end the current pause on student loan payments that the Trump administration put in place during the Covid-19 pandemic. Student debtors will begin paying their loans at the end of August.

One senator absent tonight

03:09 , Oliver O'Connell

Just one senator is not at the Capitol for tonight’s debt limit bill votes, Senator Hagerty.

He is home for his son’s high school graduation. A spokesperson says: “Senator Hagerty regrets to miss any vote, but he made a commitment to his son and his family to be with them on this important day.”

Winners: Foster care, veterans and people experiencing homelessness

02:30 , Eric Garcia

While the legislation imposes new work requirements for able-bodied adults, it also exempts people who are experiencing homelessness, veterans and people between the ages of 18 and 24 who aged out of the foster care system from such requirements. The Congressional Budget Office estimated that when the work requirements and new exclusions are in effect, “approximately 78,000 people would gain benefits in an average month” between the 2025 to 2030 period.

Amazingly the senate is close to sticking to Schumer’s 10-minute rule

02:02 , Oliver O'Connell

What would the economic impact be of hitting the debt ceiling?

01:45 , August Graham, PA

Ultimately much more than can be summarised here.

It also would depend on how long the situation goes on for. In early May, Alec Phillips, chief US political economist at Goldman Sachs Research, warned that a delay of any more than a few days would see massive amounts of money being pulled from the US economy and could easily tip the US into a recession.

Even coming close to the deadline could create problems. In the 2011 debt ceiling battle, rating agency Standard & Poor’s downgraded the US’s credit rating even though a deal was reached a day before the deadline.

“On the economic side it’s not complicated. It would just be bad,” Mr Phillips said.

He said that a brief delay would, from a direct economic perspective, be worth around 10 billion dollars a day.

The Congressional Budget Office and the US Treasury Department estimate that any brinkmanship could cost 200,000 jobs in the third quarter of the year, a short default would put half a million out of work while a protracted default would see 8.3 million jobs lost and 6.1% shaved off GDP.

The economic impacts will also be felt globally, as so much of the world economy is based on the US financial system.

Schumer reads joint statement with McConnell on defence appropriations

01:25 , Oliver O'Connell

Senator Chuck Schumer reads a joint statement with Senator Mitch McConnell on defence appropriations

“This debt ceiling deal does nothing to limit the Senate’s ability to appropriate emergency supplemental funds to ensure our military capabilities are sufficient…”

He says they can still address funding to counter threats from Iran, China, and Russia, including its ongoing war on Ukraine.

Mr Schumer adds: “I want to remind members, we were indulgent in the first vote, that’s over. We’re doing 10 minute votes. Please stay in your seats so we can finish this bill in a reasonable hour.”

The first amendment vote was defeated by a wide margin.

Loser: SNAP Recipients between the ages of 50 to 54

01:00 , Eric Garcia

Throughout the deliberations, Republicans insisted on putting in place work requirements for the Supplemental Nutrition Assistance Program, also known as SNAP and formerly called food stamps. While ultimately the agreement did not include work requirements for Medicaid, it raised the age for work requirements for able-bodied adults without children between the ages of 50 and 54.

The legislation also reduces the number of exemptions that states can use for people who would otherwise be subject to work requirements and prevents them from carrying over exemptions for more than one year.

How did Biden and McCarthy strike the debt limit deal?

Friday 2 June 2023 00:54 , Oliver O'Connell

It was advice that Mitch McConnell had offered to Joe Biden once already: To resolve the debt-limit standoff, he needed to strike a deal with House Speaker Kevin McCarthy — and McCarthy alone. But after a first meeting of the top four congressional leaders with the president in early May, the Senate minority leader felt the need to reemphasize his counsel.

After returning from the White House that day, McConnell called the president to privately urge him to “shrink the room” – meaning no direct involvement in the talks for himself, Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries.

That, McConnell stressed to Biden, was the only way to avert a potentially economy-rattling default.

Read more...

'Shrink the room:' How Biden and McCarthy struck a debt-limit deal and staved off a catastrophe

‘Let’s finish the job and send this very important bipartisan bill to the president’s desk tonight'

Friday 2 June 2023 00:35 , Oliver O'Connell

Here’s what Senator Chuck Schumer told the Senate this evening:

I am pleased, so pleased, to announce that both sides have just locked in an agreement that enables the Senate to pass legislation tonight, avoiding default.

This is what will happen on the floor, in a few minutes, the Senate will begin holding votes on 11 amendments, 10 from the Republican side, one from the Democratic side. To finish our work tonight, after the first amendment, we are limiting each vote to ten minutes. So i ask my colleagues to stay in their seats or near the floor during the votes. Let's keep this process moving quickly. After we finish voting on the amendments, we are immediately considering final passage and by passing this bill we will avoid default tonight.

America can breathe a sigh of relief, because with this process we are avoiding default. From the start, avoiding default has been our north star. The consequences of default would be catastrophic. It would almost certainly cause another recession. It would be a nightmare for our economy and millions of american families. It would take years, years to recover from. But for all the ups and downs and twists and turns it took to get here, it is so good for this country that both parties have come together at last to avoid default.

I thank my colleagues, both sides of the aisle, for their cooperation. Let's finish the job and send this very important bipartisan bill to the president's desk tonight.

What is needed to raise the debt ceiling?

Friday 2 June 2023 00:30 , August Graham, PA

A bill that would raise the debt ceiling would need to get a majority of votes in both the US Senate and the House of Representatives.

The Senate is controlled by Democrats so any increase that Joe Biden wants to get will more likely pass there. But Republican-controlled House is a bigger hurdle.

Republican House Speaker Kevin McCarthy is also very weak. It took 15 attempts for him to manage to convince enough Republicans to vote for him to become the speaker.

He therefore cannot afford to lose the support of more than a few of his colleagues, including some on the extreme fringe of the party.

Voting to commence at 7.30pm

Friday 2 June 2023 00:25 , Oliver O'Connell

Chuck Schumer has locked in a time agreement on the 11 amendment votes and final passage vote with only 10 minutes allotted to each amendment after the first one.

Voting will commence at 7.30pm.

None of the amendments are expected to pass.

Mr Schumer has asked senators to stay in or near the chamber.

Amendment votes from three senators only require majority

Friday 2 June 2023 00:13 , Oliver O'Connell

Three of the proposed amendments to the Fiscal Responsibility Act only require a simple majority. They are proposed by senators Lee, Kaine, and Kennedy. The remaining eight require a majority of 60 votes, as does the final passage of the bill.

A standalone defence bill?

Friday 2 June 2023 00:09 , Oliver O'Connell

Senator Lindsey Graham says Senate Majority Leader Chuck Schumer will soon announce a commitment from him and President Joe Biden for a standalone defence bill.

100 senators need to sign off on amendments list before voting start

Friday 2 June 2023 00:04 , Oliver O'Connell

CNN’s Manu Raju provides the following context:

Senate leaders propose a list of 11 amendments followed by a final vote on the debt ceiling bill, according to a notice just sent to all senators. All votes would be subject to a 60-vote threshold, and all are expected to fail other than final passage of the bill.

They need all 100 senators to sign off on the deal to start voting. If there’s a time agreement, this would push final passage vote until very late into the night, potentially past midnight.

This could be a long night...

Friday 2 June 2023 00:02 , Oliver O'Connell

Andrew Desidero of Punchbowl News reports that there will be 11 amendment votes in the Senate before a vote on the final passage of the Fiscal Responsibility Act.

Winner: Sen Joe Manchin (D-WV)

Friday 2 June 2023 00:00 , Eric Garcia

Even with a Republican House and an additional Senate seat, Sen Joe Manchin continues to have a profound impact on any piece of legislation. Throughout the deliberations, House Speaker Kevin McCarthy cited him. Mr Manchin has raised a ruckus in recent months, opposing the Biden administration’s nominees in response to the White House’s implementation of the Inflation Reduction Act, the signature law he brokered with Senate Majority Leader Chuck Schumer last year, which he says is too focused on promoting green energy alternatives.

But the debt limit agreement gave him a win when it included the approval of the Mountain Valley Pipeline, a natural gas pipeline that would span from West Virginia to Virginia. Mr Manchin had attempted to get the pipeline approved last year to no avail. But the approval also incensed many Virginia Democrats, including Sen Tim Kaine (D-VA), who proposed an amendment to strike the provision from the text.

Biden and McCarthy’s debt limit deal went through – but there are winners and losers

Thursday 1 June 2023 23:30 , Eric Garcia

The House of Representatives voted on Wednesday evening to raise the debt limit, with more Democrats voting to raise the limit than Republicans, and all but guaranteeing its passage in the United States Senate.

The vote served as a triumph for House Republicans as they moved the White House from initially wanting to have a clean debt limit increase to agreeing to some spending cuts. But 71 Republicans still opposed the agreement negotiated by the Biden administration and Reps Patrick McHenry (R-NC) and Garret Graves (R-LA).

Senate Majority Leader Chuck Schumer has said he hopes to pass the legislation quickly and before 5 June, when the Treasury Department says the United States will be unable to fulfill its debt obligations and risk defaulting on its debt.

This was the first major test for House Republicans’ resolve since they took control of the lower chamber in January after a protracted series of votes to get a speaker. Some conservatives crowed that the bill did not go far enough in spending cuts while House Republican leaders say they forced the White House’s hand. Conversely, progressive Democrats criticised the deal for putting in place work requirements for social welfare programs.

These are the winners and losers of the debt limit standoff:

Biden and McCarthy’s debt limit deal went through – but there are winners and losers

What did the June deadline mean?

Thursday 1 June 2023 23:00 , August Graham, PA

The Treasury had originally set a June 1 deadline to raise or suspend the debt ceiling, but last week extended it until next Monday.

This deadline is not as inflexible as it might first seem. Instead it is more like an estimate of when the US might hit up against the ceiling.

The debt limit was increased by 2.5 trillion dollars in 2021 to a little under 31.4 trillion dollars, but by January this year US Treasury Secretary Janet Yellen said that the Government was set to reach that limit.

She has since taken measures to make the money last as long as possible, using different tools to avoid a default.

This has meant issuing hundreds of billions of dollars of IOUs, using up the hundreds of billions in cash that the Government had in its accounts, and also using up the tax money that it collected in the intervening months.

The deadline is also not set in stone. If the Government can eek out a few more weeks and make its money last until June 15 there will be another injection of tax money into the coffers as another tax deadline approaches.

What is the debt ceiling now?

Thursday 1 June 2023 22:30 , August Graham, PA

The ceiling has been raised many times over the past century since it was introduced – taking it to 31.4 trillion dollars.

Historically this largely happened without much drama – after all Congress gets to vote on the Government’s spending during the budget negotiations.

But from the mid-1990s the US Republicans have on several occasions used the debt ceiling as leverage to pressure Democratic Presidents into making changes to its spending.

Underestimated McCarthy emerges from debt deal empowered as speaker, still threatened by far right

Thursday 1 June 2023 22:00 , Lisa Mascaro, AP

House Speaker Kevin McCarthy is nothing if not a political survivor.

Underestimated from the start, the Republican who cruised around his California hometown of Bakersfield and stumbled into a career in Congress was never taken too seriously by the Washington establishment.

With overwhelming House passage of the debt ceiling and budget deal he negotiated with President Joe Biden, the emergent speaker proved the naysayers and eye-rollers otherwise. A relentless force, he pushed a reluctant White House to the negotiating table and delivered the votes from his balky House GOP majority to seal the deal.

“You still ask the same questions each week: Do you think you can pass the bill this week. Do you think you will still be speaker next week,” McCarthy chided reporters after Wednesday’s late night vote.

“Keep underestimating us,” he said, “and we’ll keep proving to the American public that we’ve never given up.”

Read more:

Underestimated McCarthy emerges from debt deal empowered as speaker, still threatened by far right

Josh Hawley announces he’s a no on debt deal: ‘We’ve got to quit making China rich'

Thursday 1 June 2023 21:36 , Gustaf Kilander

‘I live in reality, not conservative fantasy land,’ Marjorie Taylor Greene says

Thursday 1 June 2023 21:30 , Gustaf Kilander

What is the debt ceiling rule?

Thursday 1 June 2023 21:10 , August Graham, PA

The US introduced the debt limit in 1917 at what today looks like a tiny 11.5 billion dollars.

At the time, they set it up to make the process of borrowing money easier – until then Congress had to pass new legislation to approve all borrowing.

By instead putting a limit on borrowing, it allowed the executive branch of the Government more flexibility in what and when it borrowed, so long as it did not borrow more than the ceiling.

White House soft-pedals debt ceiling achievement to avoid pushing away GOP

Thursday 1 June 2023 20:50 , Gustaf Kilander

White House staffers attempted to soft-pedal their agreement with House Speaker Kevin McCarthy, despite considering a major win, according to Politico.

Officials were concerned that any boasting about the agreement without prompt a Republican backlash and make it harder to pass.

Other than ensuring its passage, the Biden team also wanted to appear as the “adults in the room” in a highly partisan environment and use the negotiations as an outline for the 2024 reelection campaign.

What is the US debt ceiling and why does it matter that lawmakers have reached a deal?

Thursday 1 June 2023 20:30 , August Graham, PA

Shares inched higher in London on Thursday, and the pound made gains against the dollar, after US lawmakers in the House of representatives passed a new bill on the country’s debt ceiling.

The bill, which suspends the ceiling, passed with both Democrats and Republicans supporting it, and will head to the US Senate for the final approval.

The House – which is Republican controlled – had widely been seen as the bigger hurdle out of the two bodies of Congress.

By around 2pm, ahead of US markets opening, London’s FTSE 100 was trading up 0.2% at 7,462 points.

One pound could buy around 1.25 dollars, up one third of a per cent from the day before.

But what is the debt ceiling, and what might have happened if the US had hit it?

What is the US debt ceiling and why does it matter that lawmakers have reached a deal?

Global stocks recover after debt ceiling bill passed in US

Thursday 1 June 2023 20:10 , Anna Wise, PA

Global shares clawed back gains on Thursday after the long-awaited US debt ceiling saga neared a conclusion.

Members of the House of Representatives, which is Republican controlled, passed a new bill which suspends the ceiling, and it is now heading to the Senate for final approval.

Global sentiment had been rocked over fears the nation would default on its own debt and not be able to pay any bills, with an economic impact that would be felt globally.

European markets edged higher and US investors were feeling more positive after sustaining significant losses earlier in the week, but it was a somewhat muted reaction to the debt ceiling breakthrough.

Mining stocks helped lift the FTSE 100 higher after a jump in oil and copper prices, but it still lagged below the 7,500 mark.

Read more:

Global stocks recover after debt ceiling bill passed in US

Boebert didn’t turn up to vote on debt ceiling deal

Thursday 1 June 2023 19:45 , Oliver O'Connell

MAGA firebrand Lauren Boebert emerged as one of the fiercest critics to the debt ceiling deal brokered by House leader Kevin McCarthy and President Joe Biden to avoid a catastrophic default.

But when it was time for the House of Representatives to cast their votes on Wednesday night, she failed to show up.

Ms Boebert was mocked on social media after she reportedly “narrowly missed the vote, running up the steps right as they gaveled”, according to Axios Capitol Hill reporter Juliegrace Brufke.

Bevan Hurley reports.

Boebert didn’t turn up to vote on debt ceiling deal she furiously campaigned against

Eric Bolling says McCarthy debt deal handed Biden second term

Thursday 1 June 2023 19:20 , Oliver O'Connell

Here’s what Newsmax host Eric Bolling had to say about the debt deal, via Mediaite:

Speaking before the final vote on The Balance, Bolling shredded the particulars and particularly shredded McCarthy for giving the win to the Democrats.

“Joe Biden must be so happy right now,” Bolling said. “He doesn’t have to deal with his massive deficit issues until after the 2024 election. How convenient. And for that, you can thank none other than House Speaker Kevin McCarthy.”

Bolling said that it could have been a big issue for Republicans to revisit in the campaign, but “Sleepy Joe didn’t want that, and Kevin McCarthy may have handed Joe Biden a second term in this deal.”

Senators aiming for final vote tonight

Thursday 1 June 2023 19:10 , Oliver O'Connell

CNN’s Manu Raju reports:

Leaving lunch, Sens. Rick Scott and Mitt Romney told me that senators are looking to finish up the debt limit vote tonight. Meaning amendment votes (which will fail) and final passage. They still need an agreement of all 100 senators, but the goal is to get a final vote tonight.

What’s next for Biden-McCarthy debt ceiling deal

Thursday 1 June 2023 19:00 , Oliver O'Connell

The Senate will be in a race against the clock to pass the bipartisan debt limit legislation that the House of Representatives passed on Wednesday evening before the United States hits the date when it will default on its debt.

Eric Garcia explains what has to be done.

What’s next for Biden-McCarthy debt limit deal as Senate races to beat default?

Angry progressives and conservatives hit out as Democrats push through Biden-McCarthy debt ceiling deal

Thursday 1 June 2023 18:45 , Oliver O'Connell

The House of Representatives has voted to raise the debt limit, thereby ensuring the United States will avoid defaulting on its debt, despite vocal opposition from many Republicans in the House majority.

Eric Garcia explains who is unhappy.

Progressives and conservatives complain as Biden-McCarthy debt deal passes

Watch: Lindsey Graham says ‘party of Ronald Reagan is dying'

Thursday 1 June 2023 18:30 , Oliver O'Connell