By a margin of 314 to 117, the agreement between Joe Biden and Kevin McCarthy wins bipartisan support, clearing path to avert unprecedented sovereign default.
The US House of Representatives on Wednesday passed a bill to suspend the country’s debt ceiling and set federal spending limits, putting it on course to avert a looming sovereign default that was days away. House Speaker Kevin McCarthy managed to tamp down strident opposition to the bill from hard-right Republicans who were unable to prevent it from coming to the chamber’s floor, where it passed 314 to 117, with 71 members of the speaker’s party voting against it. The bill eliminates the debt ceiling for two years and holds spending flat through the 2024 presidential election , while allowing spending unrelated to national defence to increase by 1 per cent in 2025. Security spending – including defence – would be capped at US$886 billion, preserving a 3.3 per cent increase in the defence budget that Biden requested, while other spending would be capped at $704 billion. The two allocations would rise to US$895 billion and US$711 billion respectively in 2025. Some Republicans have resisted the agreement by pointing out that the increase in defence spending is below the current inflation rate of about 5 per cent, meaning it represents a cut in real dollar terms.