The US Capitol building is seen from the base of the Washington Monument as the sun rises in Washington, DC, on May 28, 2023. President Joe Biden and Republican leader Kevin McCarthy announced a deal on May 27, 2023, to raise the debt ceiling, dragging the United States back from the precipice of default with only a few days to spare. (PHOTO / AFP)
WASHINGTON – The US Senate is on track to pass a bill to lift the government's $31.4 trillion debt ceiling late on Thursday, Democratic Majority Leader Chuck Schumer announced, adding, "We are avoiding default tonight."
All 100 senators reached an agreement to debate up to 11 amendments and then promptly vote on passing the legislation, before a Monday deadline for suspending the debt limit through Jan 1, 2025. If the plan succeeds, Congress would quickly send the bill to President Joe Biden to sign, averting a catastrophic default, Schumer said.
The House passed the bill on Wednesday, as both chambers raced against a Monday deadline.
The Senate voted 63-36 to approve the bill that was passed by the House of Representatives, as lawmakers raced against the clock following months of partisan bickering between Democrats and Republicans.The Treasury Department had warned it would be unable to pay all its bills on June 5 if Congress failed to act by then
"America can breathe a sigh of relief, a sigh of relief because in this process we are avoiding default," Schumer said in remarks to the Senate.
The expectation is that the amendments will not garner enough support to be attached to the legislation. If any one of them does, the measure would have to be sent back to the House of Representatives, which could increase the possibility of a first-ever default on Washington's debt payments.
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Schumer and his Republican counterpart Minority Leader Mitch McConnell vowed to do all they could to speed along the bill negotiated by Biden and Republican House Speaker Kevin McCarthy, which would suspend the debt limit, essentially temporarily removing it, in exchange for a cap on spending.
The Treasury Department has warned it will be unable to pay all its bills on June 5 if Congress fails to act.
Treasury technically hit the statutory $31.4 trillion limit on borrowing in January. Since then it has been utilizing "extraordinary measures" to patch together the money needed to pay the government's bills.
Senate Majority Leader Chuck Schumer (right) speaks to reporters after a policy luncheon, May 31, 2023, on Capitol Hill in Washington. (PHOTO / AP)
For the past five months Democrats and Republicans have jousted over the debt limit. Republicans, who control the House with a narrow majority, have insisted that wide-ranging cuts in government spending be part of any deal raising the debt limit.
Meantime, Biden, Treasury Secretary Janet Yellen and congressional leaders all acknowledged that triggering a debt default for lack of funds would have serious ramifications.
Schumer drove that point home even at this late hour as he steered the bill toward final passage.
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A default, he said, "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."
'Time is a luxury'
The Republican-controlled House passed the bill on Wednesday evening in a 314-117 vote. McCarthy lost the support of dozens of his fellow Republicans.
House Speaker Kevin McCarthy along with other Republican members of the House, speaks at a news conference after the House passed the debt ceiling bill at the Capitol in Washington, May 31, 2023. (PHOTO / AP)
"Time is a luxury the Senate does not have," Schumer said on Thursday. "Any needless delay or any last-minute holdups would be an unnecessary and even dangerous risk."
The main argument was over spending for the next couple years on "discretionary" programs, such as housing, environmental protections, education and medical research that Republicans wanted to cut deeply while seeking increases in funding for the military, veterans and possibly border security
Biden's Democrats control the Senate by a thin 51-49 margin. The chamber's rules require 60 votes to advance most legislation, meaning at least nine Republican votes are needed to pass most bills, including the debt ceiling deal.
Among the amendments to be debated are ones to force deeper spending cuts than those contained in the House-passed bill and to stop the speedy final approval of a West Virginia energy pipeline.
Republican Senator Roger Marshall offered an amendment to impose new border controls amid high numbers of immigrants arriving at the US-Mexico border. His measure, he said, would "put an end to the culture of lawlessness at our southern border."
The Senate defeated the amendment, however, after Democrats said it would strip away protections for child migrants and rob American farmers of needed workers.
Republicans also want to beef up defense spending beyond the increased levels contained in the House-passed bill.
Schumer stated that the spending caps contained in this legislation will not constrain Congress in approving additional money for emergencies.
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The bill was cobbled together over weeks of intensive negotiations between surrogates for Biden and McCarthy. The main argument was over spending for the next couple years on "discretionary" programs, such as housing, environmental protections, education and medical research that Republicans wanted to cut deeply while seeking increases in funding for the military, veterans and possibly border security.
In the end, the Republican spending-cut proposals were significantly pared.
The nonpartisan Congressional Budget Office estimated the bill would save $1.5 trillion over 10 years. That is below the $4.8 trillion in savings that Republicans aimed for in a bill they passed through the House in April, and also below the $3 trillion in deficit that Biden's proposed budget would have reduced the deficit over that time through new taxes.
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The last time the United States came this close to default was in 2011. That standoff hammered financial markets, led to the first-ever downgrade of the government's credit rating and pushed up the nation's borrowing costs.