What to Know in Washington: Debt Deal Faces Test in Congress

The debt limit agreement forged by President Joe Biden and Speaker Kevin McCarthy heads into a crucial final stretch with less than a week to win congressional passage before a June 5 default deadline.

Biden and McCarthy (R-Calif.) spent much of the Memorial Day holiday lobbying members of their respective parties to build enough support ahead of a House vote expected Wednesday.

If the two leaders can overcome expected opposition from their flanks, the deal goes to the Senate, where a single objection risks triggering time-consuming procedures that threaten to bring the US right to the brink of a first-ever default.

Photographer: Saul Loeb/AFP via Getty Images

US President Joe Biden meets with US House Speaker Kevin McCarthy (R-Calif.) (L) about the debt ceiling, in the Oval Office of the White House in Washington, D.C., on May 22, 2023.

“I never say I’m confident about what the Congress is going to do, but I feel very good about it,” Biden told reporters Monday.

The bill sets the course for federal spending through 2025 and will suspend the debt ceiling until Jan. 1, 2025, likely putting off another fight over federal borrowing authority until the middle of that year. In exchange for Republican votes for the suspension, Democrats agreed to cap federal spending for the next two years.

Read More: Debt Deal to Hit a US Economy Already Facing Recession Risk

Across the full House, are at least 10 GOP “no” votes. Rep. Tom Emmer (Minn.), Republican’s chief vote counter, worked the phones over the weekend to prevent that number from swelling much beyond that. His efforts will shift today to more direct attempts at persuasion as lawmakers return to the Capitol.

Sen. Mike Lee (R-Utah) has threatened to hold up passage of a bill he doesn’t like, and any senator has the power to force days of delay. At least three other conservative GOP senators made clear in recent days they oppose the legislation.

House Democratic leader Hakeem Jeffries (D-N.Y.) and his top vote counter, Rep. Katherine Clark (D-Mass.), are also trying to pin down votes they need for the bipartisan compromise. Complicating their efforts is the Sierra Club, which urged opposition Monday citing provisions that would expedite approvals for a natural gas pipeline running across West Virginia and time limits it would impose on environmental reviews of energy projects.

Read More: Manchin Gets Mountain Valley Pipeline Deal Into Debt Bill

Senators in both parties could also insist on voting on amendments to address the spending caps. Defense hawks are unhappy with a 3.3% increase proposed by Biden not keeping up with inflation. Read the full storyfrom Billy House, Steven T. Dennis, and Laura Litvan.

More on the Debt Deal

Key Takeaways From Biden-McCarthy Deal

Here’s a look at the most contentious and economically consequential provisions of the legislation Biden and McCarthy unveiled on Sunday.

Budget Deal Puts Government Services on a Diet

The debt limit deal would rein in spending on some federal government services but barely dents the roughly $20 trillion in combined budget deficits projected over the next decade.

Debt Deal to Hit a US Economy Already Facing Recession Risk

The cap on government spending in Washington’s deal to raise the federal debt limit adds a fresh headwind to a US economy already burdened by the highest interest rates in decades and reduced access to credit.

Budget Whiz Shalanda Young Helped Broker Toughest Biden Deal Yet

Shalanda Young found herself last week in a roomful of hand-picked peacemakers at the highest-stakes juncture of her career — and arguably of her boss’s legacy.

Murky Laws Keep Contractors Wary of Losses in Next Debt Crisis

Lawyers representing government contractors have been keeping track of the legal uncertainties exposed by even the possibility of a debt limit breach, expressing concern for the future if the government doesn’t make certain procurement-related laws more explicit.

CONGRESS SCHEDULE

• Senators return at 3 p.m. with a judicial confirmation vote set for 5:30 p.m.
• The House is back at 2 p.m. with votes at 6:30 p.m. on a slate of bills to paring back finance regulations. The House Rules Committee meets at 3 p.m. on the debt bill.

BIDEN’S AGENDA

• The president departs Delaware at 10 a.m. and arrives at the White House shortly after 11 a.m.
• Press Secretary Karine Jean-Pierre holds a press briefing alongside OMB Director Shalanda Young at 2:45 p.m.

Politics & Probes

DeSantis, Now a Candidate, Finally Engages Trump Head On

Florida Gov. Ron DeSantis (R) studiously avoided even mentioning Donald Trump’s name for months, instead making veiled references to the “culture of losing” in the Republican party. Now, he’s drawing contrasts with the former president on a range of issues including abortion, immigration, and the economy.

Ohio Republicans Seek Friendly Courts to Check Democratic City

Republicans are chipping away at the power of the blue-county judges in Ohio’s capital as the politics of the state and the city grow farther apart.

Beijing vs Washington

US ‘Won’t Tolerate’ China’s Micron Chips Ban

Commerce Secretary Gina Raimondo said the US “won’t tolerate” the recent decision by Chinese authorities to ban chips by Micron in some critical sectors, using her sharpest language yet to describe Washington’s reaction.

• Top US and Japan commerce officials agreed to work together to explore the development of next generation semiconductors as part of efforts to maintain regional economic order. Read more

Musk Says Tesla to Boost China Business in Meeting with Minister

Tesla opposes “decoupling” and is willing to expand business in China, Elon Musk says in a meeting with China’s Foreign Minister Qin Gang in Beijing, according to a government statement.

China Spurns US Defense Chiefs Talks Showing Limits to Ties

China declined a US request for the countries’ defense chiefs to meet this week, Beijing’s latest rebuff of the Biden administration’s efforts to restore ties with key officials amid heightened tensions.

To contact the reporters on this story: Brandon Lee in Washington at blee@bgov.com; Giuseppe Macri in Washington at gmacri@bgov.com

To contact the editor responsible for this story: Kayla Sharpe at ksharpe@bloombergindustry.com