House OKs debt ceiling bill to avoid default, sends Biden-McCarthy deal to Senate

WASHINGTON — Veering away from a default crisis, the House approved a debt ceiling and budget cuts package late Wednesday, as President Joe Biden and Speaker Kevin McCarthy assembled a bipartisan coalition of centrist Democrats and Republicans against fierce conservative blowback and progressive dissent.

The hard-fought deal pleased few, but lawmakers assessed it was better than the alternative — a devastating economic upheaval if Congress failed to act. Tensions ran high throughout the day as hard-right Republicans refused the deal, while Democrats said "extremist" GOP views were risking a debt default as soon as next week.

With an overwhelming House vote, 314-117, the bill now heads to the Senate with passage expected by week's end.

McCarthy insisted his party was working to "give America hope" as he launched into a late evening speech extolling the bill's budget cuts, which he said were needed to curb Washington's "runaway spending."

Amid deep discontent from Republicans who said the spending restrictions did not go far enough, McCarthy said it is only a "first step."

Speaker of the House Kevin McCarthy, R-Calif., walks to the House chamber before a vote on the debt limit bill Wednesday at the Capitol in Washington.Jose Luis Magana ~ Associated Press

Speaker of the House Kevin McCarthy, R-Calif., walks to the House chamber before a vote on the debt limit bill Wednesday at the Capitol in Washington.Jose Luis Magana ~ Associated Press

U.S. Rep. Jason Smith also said there is more work to be done.

Jason Smith

Jason Smith

"After more than two years of reckless Washington Democrat policies that produced the worst cost-of-living increase in 40 years, a war on American energy, and widespread labor shortages because of paying people not to work, I voted for the Fiscal Responsibility Act because it takes much-needed steps to address the crises President Joe Biden's policies have created for American families," he said in a statement to the Southeast Missourian. "With this bill, we're delivering the American people the largest spending cut in our nation's history, and for the first time since I've been in Congress we will send a bill to the president's desk that reduces spending.

"The bill will help lift Americans out of poverty and get people back to work by making the most significant reforms to welfare and food stamp programs in decades with the addition of true work requirements, helping all the small businesses on Main Street with 'Help Wanted' signs out front. In addition, the legislation rolls back burdensome red tape in the permitting process to speed up the timeline for construction on critical, job-creating infrastructure projects — whether it's building an oil pipeline or new roads and bridges.

"This bill also blocks the IRS from being able to hire the new agents promised from the Inflation Act for this year.

"While I'm glad this bill to rein in spending and avert a major economic crisis is closer to becoming law, the fight to get our nation back on track is far from over. It's now up to Congress to enact fiscally-responsible bills that reduce our spending-driven deficits."

The package makes some inroads in curbing the nation's debt as Republicans demanded, without rolling back Trump-era tax breaks as Biden wanted. To pass it, Biden and McCarthy counted on support from the political center, a rarity in divided Washington.

In a statement released after the vote, Biden said: "I have been clear that the only path forward is a bipartisan compromise that can earn the support of both parties. This agreement meets that test."

He called the vote "good news for the American people and the American economy."

Biden had sent top White House officials to the Capitol and called lawmakers directly to shore up backing. McCarthy worked to sell skeptical fellow Republicans, even fending off challenges to his leadership, in the rush to avert a potentially disastrous U.S. default.

Swift passage later in the week by the Senate would ensure government checks will continue to go out to Social Security recipients, veterans and others and would prevent financial upheaval at home and abroad. Next Monday is when the Treasury has said the U.S. would run short of money to pay its debts.

Overall, the 99-page bill restricts spending for the next two years, suspends the debt ceiling into January 2025 and changes some policies, including imposing new work requirements for older Americans receiving food aid and greenlighting an Appalachian natural gas line that many Democrats oppose.

It bolsters funds for defense and veterans, and guts new money for Internal Revenue Service agents.

Raising the nation's debt limit, now $31 trillion, ensures Treasury can borrow to pay already incurred U.S. debts.

Top GOP deal negotiator Rep. Garret Graves of Louisiana said Republicans were fighting for budget cuts after the past years of extra spending, first during the COVID-19 crisis and later with Biden's Inflation Reduction Act, with its historic investment to fight climate change paid for with revenues elsewhere.

But Republican Rep. Chip Roy, a member of the Freedom Caucus helping to lead the opposition, said, "My beef is that you cut a deal that shouldn't have been cut."

For weeks negotiators labored late into the night to strike the deal with the White House, and for days McCarthy has worked to build support among skeptics. At one point, aides wheeled in pizza at the Capitol the night before the vote as he walked Republicans through the details, fielded questions and encouraged them not to lose sight of the bill's budget savings.

The speaker has faced a tough crowd. Cheered on by conservative senators and outside groups, the hard-right House Freedom Caucus lambasted the compromise as falling well short of the needed spending cuts, and they vowed to try to halt passage.

A much larger conservative faction, the Republican Study Committee, declined to take a position. Even rank-and-file centrist conservatives were unsure, leaving McCarthy searching for votes from his slim Republican majority.

Ominously, the conservatives warned of possibly trying to oust McCarthy over the compromise.

One influential Republican, former President Donald Trump, held his fire: "It is what it is," he said of the deal in an interview with Iowa radio host Simon Conway.

House Democratic leader Hakeem Jeffries said it was up to McCarthy to turn out Republican votes in the 435-member House, where 218 votes are needed for approval.

As the tally faltered on an afternoon procedural vote, Jeffries stood silently and raised his green voting card, signaling that the Democrats would fill in the gap to ensure passage. They did, advancing the bill that hard-right Republicans, many from the Freedom Caucus, refused to back.

"Once again, House Democrats to the rescue to avoid a dangerous default," said Jeffries, D-N.Y.

"What does that say about this extreme MAGA Republican majority?" he said about the party aligned with Trump's "Make America Great Again" political movement.

Then, on the final vote hours later, Democrats again ensured passage, leading the tally as 71 Republicans bucked their majority and voted against it.

The nonpartisan Congressional Budget Office said the spending restrictions in the package would reduce deficits by $1.5 trillion over the decade, a top goal for the Republicans trying to curb the debt load.

In a surprise that complicated Republicans' support, however, the CBO said their drive to impose work requirements on older Americans receiving food stamps would end up boosting spending by $2.1 billion over the time period. That's because the final deal exempts veterans and homeless people, expanding the food stamp rolls by 78,000 people monthly, the CBO said.

Liberal discontent, though, ran strong as nearly four dozen Democrats also broke away, decrying the new work requirements for older Americans, those 50-54, in the food aid program.

Some Democrats were also incensed that the White House negotiated into the deal changes to the landmark National Environmental Policy Act and approval of the controversial Mountain Valley Pipeline natural gas project. The energy development is important to Sen. Joe Manchin, D-W.Va., but many others oppose it as unhelpful in fighting climate change.

On Wall Street, stock prices were down.

In the Senate, Democratic Majority Leader Chuck Schumer and Senate Republican leader Mitch McConnell are working for passage by week's end.

Schumer warned there is "no room for error."

Senators, who have remained largely on the sidelines during much of the negotiations, are insisting on amendments to reshape the package. But making any changes at this stage seemed unlikely with so little time to spare before Monday's deadline.

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AP White House Correspondent Zeke Miller and AP writers Mary Clare Jalonick, Seung Min Kim and Jill Colvin and video journalist Nathan Ellgren contributed to this report.