On Tuesday evening, the House Rules Committee voted by a margin of 7-6 to advance the debt ceiling deal, reported C-SPAN — setting up a vote of the full House tomorrow, and bringing a solution to avert a first-of-its-kind U.S. debt default one step closer.
The agreement, which was secured after weeks of tense negotiations between President Joe Biden and House Speaker Kevin McCarthy (R-CA), would suspend the debt ceiling for two years. In return, it would institute trillions in spending reductions, including clawing back unspent COVID relief and a fraction of new IRS funding, imposing new limits on discretionary spending, changing work requirements for food stamps, and streamlining permits for new energy projects.
A debt default would potentially disrupt the entire world economy, which uses U.S. Treasury bonds as a foundational security. It could also skyrocket interest rates on everything from mortgages to credit cards, increasing debt burdens on U.S. households and making it nearly impossible to borrow money.
Biden initially rejected the idea of negotiating over the issue at all, demanding a clean debt ceiling increase and that budget issues be worked out separately after. However, he later began negotiating as the deadline to avoid a default become more urgent.
A majority of Republicans are expected by House leadership to support the deal. However, many members of the far-right Freedom Caucus are unhappy with the agreement, with Rep. Matt Gaetz (R-FL) even warning it could set up a vote to remove McCarthy from the Speakership.
Some progressive Democrats, too, are frustrated at the cuts mandated by the deal and their lack of inclusion in the process, although many Democrats are expected to vote for the agreement as well.
