The US Senate prepared Thursday to take up the debt-limit deal forged by President Joe Biden and House Speaker Kevin McCarthy with some senators threatening to delay the measure as a default deadline nears.
Lawmakers from both parties in the House joined to approve the bill 314-117 Wednesday evening. The legislation would impose restraints on government spending through the 2024 election and avert a destabilizing US default.
“The Senate will stay in session until we send a bill avoiding default to President Biden’s desk,” Majority Leader Chuck Schumer, a New York Democrat, said. “Any change to this bill that forces us to send us to send it back to the House would be unacceptable, it would almost guarantee default.”
Schumer formally began the process by placing the bill on the Senate calendar to blunt the impact of any delaying tactics by opponents. The Treasury says it will start to run out of cash to pay the nation’s bills on June 5.
Investors have largely judged the risk of a US default as resolved and are shifting their attention to other uncertainties, such as another possible Federal Reserve interest-rate increase and signs of a weakening Chinese economy. The S&P 500 was higher mid-day Thursday in New York, while Treasury yields were generally lower.
Approval by the Senate is seen as virtually certain, and the only question is timing. The No. 2 Senate Republican, John Thune, told reporters Thursday that they were trying to get the number of amendments “down to a manageable level.”
“I would say it’s trending more towards tomorrow” for a vote, Thune said shortly before noon as negotiations continue.
Under Senate rules, any member can force a delay in final passage. Leaders were negotiating with bill opponents to avoid that by agreeing to votes on amendments that were unlikely to pass.
One staunch opponent, Republican Mike Lee of Utah, criticized the bill in an interview on Fox Thursday morning and questioned the Treasury’s estimate of a June 5 default deadline, but he didn’t say he would seek to slow the debate.
“I want to make one thing very, very clear: We are not going to default,” said Lee, who huddled on the House floor with conservative opponents of the bill during the vote in that chamber late Wednesday.
Fellow Republican Senator Lindsey Graham on Thursday threatened to use procedural delays to tie the bill up until Tuesday — one day after the X-date — if he isn’t assured that funds would continue flowing to Ukraine.
Under the deal, defense spending would grow by 3.3% next year. But funds to equip Ukraine in its war against Russia have typically been handled by supplemental spending which would not be included in the caps.
Facing a revolt from some hawkish Republicans, Minority Leader Mitch McConnell indicated more Pentagon dollars could come later on and said national security funding remains an “urgent” priority.
Read More: Defense Hawks Eye Emergency Funds to Exceed Caps in Debt Deal
The debt-limit agreement won the backing of two-thirds of House Republicans in a rare moment of bipartisan accord in a bitterly divided Washington.
“It will pass. The votes are there as demonstrated in the House, it’s a parallel situation in the Senate,” Oregon Democratic Senator Jeff Merkley, who intends to vote against the measure, said on CNN Thursday morning.
--With assistance from Steven T. Dennis, Tyler Kendall and Molly Smith.
(Updates with Schumer, others beginning in the 3rd paragraph)
Author: Ari Natter, Erik Wasson and Laura Litvan
