What to Know in Washington: Debt Limit Deal Headed to Senate

Debt limit legislation forged by President Joe Biden and Speaker Kevin McCarthy is headed to the Senate after the House passed the measure 314-117 last night.

The deal to impose restraints on government spending through the 2024 election and avert a destabilizing US default will come up in the Senate today, where approval is virtually certain and the only question is timing. John Thune (R-S.D.), the Senate’s No. 2 Republican, said Wednesday there could be a deal to pass the measure by Friday night, days ahead of the June 5 default deadline.

Lawmakers from both parties joined to approve the bill Wednesday evening as a default deadline draws near. The vote cements Biden’s reputation for pragmatism and working across party lines as he seeks a second term and allows McCarthy (R-Calif.) to claim success in his first major test as Speaker.

Photographer: Ting Shen/Bloomberg

McCarthy walks through the US Capitol building in Washington, DC, on Wednesday, May 31, 2023.

The agreement won the backing of two-thirds of House Republicans, an important show of confidence for McCarthy, whose narrow GOP majority leaves him vulnerable to challenges from discontented members. But the bill ultimately received more votes from the Democratic minority than the GOP majority, a fact conservative critics will use to argue the speaker made a bad deal.

The outcome marked a rare moment of bipartisan accord in a bitterly divided Washington.

The debt bill would remove the threat of another default crisis for the remainder of Biden’s current term, suspending the debt ceiling until Jan. 1, 2025. In exchange, Democrats agreed to cap federal spending into 2025, likely forcing some retrenchment in government services given the current 5% annual inflation rate.

Biden urged the Senate to pass the debt limit agreement “as quickly as possible” so that he can sign it into law, according to a White House statement. Erik Wasson and Billy House cover the latest on the bill.

More Debt Deal Next Steps

McCarthy’s Debt-Limit Win Puts Him on Thin Ice With Hard-Liners

McCarthy must hold at bay restive right-wing lawmakers angry that the speaker couldn’t wrest from Biden even deeper spending cuts and restrictions for social programs, and they’re now weighing whether to try to replace him.

Defense Hawks Eye Emergency Funds to Exceed Caps in Debt Deal

Republicans and Democrats are coalescing around a time-tested way to bypass spending caps for defense: an emergency supplemental. Lawmakers are openly talking about stacking a future supplemental spending bill for Ukraine with other defense spending, partly to help the industry make weapons for Ukraine, but also to fill coffers for other programs meant to give the US an advantage over China.

CONGRESS’ SCHEDULE

• The Senate returns at 10 a.m. to vote on rescinding Biden’s student loan forgiveness plan.
• House lawmakers are on recess until next week.

BIDEN’S AGENDA

• The president delivers the commencement address at the Air Force Academy at Falcon Stadium in El Paso County, Colorado at 9:40 a.m. local time before departing for Washington and arriving shortly before 8 p.m.

Elections & Politics

First-Generation Americans Vie to Fill Cicilline’s House Seat

Rhode Island voters in a special Democratic primary will see a ballot dominated by Black and Hispanic candidates, including several women.

NBA Kills Zombie Campaign Ad Months After Senate Election Ended

A campaign ad from Colorado’s Senate race somehow nearly outlasted the Denver Nuggets’ playoff ambitions. Though Sen. Michael Bennet (D) won re-election in November, League Pass, which gives subscribers live access to NBA games, had a campaign attack ad in its rotation of commercials as recently as May 19, based on the Twitter gripe of an annoyed viewer.

DeSantis Seeks to Connect With Iowans as Trump Alternative

Florida Gov. Ron DeSantis (R) sought to court Iowa voters as the best alternative to Donald Trump Wednesday, continuing the official kickoff to his presidential campaign.

Trump Seeks to Oust Judge From New York Criminal Case

Trump is seeking the removal of Manhattan Supreme Court Justice Juan Merchan who is overseeing his prosecution, claiming the judge has a conflict because his daughter works for a Democratic consulting firm that has Vice President Kamala Harris as a client.

What Else We’re Reading

Road Safety Agency Left Without a Leader as Crash Deaths Spike

Ann Carlson, chief counsel for the National Highway Traffic Safety Administration, stepped aside from seeking to be the permanent administrator — a show of GOP political muscle as Democrats hold only a tiny Senate majority.

DHS Asked to Replace Aging Technology to Plug Security Risks

The Department of Homeland Security needs to replace aging technology systems to prevent security breaches, Sen. Maggie Hassan (D-N.H.) said at a hearing Wednesday.

Space Startups Find Cash Backing Among Defense Contractor Giants

Defense contractors like Lockheed Martin, Booz Allen, and Raytheon that have invested heavily in their venture portfolios may benefit most from a crunch in the capital-intensive space industry if cash-strapped startups need to exit the arena.

Airlines Are Weighing Passengers for Safety Reasons After Covid

Air New Zealand is the latest ariline to ask travelers to be weighed before flying, carrying out a survey in Auckland through June. The carrier plans to ask more than 10,000 customers boarding international flights to take part, saying the data will help it calculate the “weight and balance of the loaded aircraft.”

To contact the reporter on this story: Giuseppe Macri in Washington at gmacri@bgov.com

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