House lawmakers passed a bill – the Fiscal Responsibility Act of 2023, to put a hold on the debt ceiling, enabling the U.S. to pay off its debts while also cutting federal spending going forward.
The bill passed the House in a bipartisan 314-117 vote on Wednesday night, with just days to default and concessions made on both sides.
President Biden called it a “critical step forward to prevent a first-ever default,” and House Speaker Kevin McCarthy said lawmakers “made history” with the scope of their savings.
The Act establishes spending limits for the federal budget and implements new policy changes, such as taking back about $27 billion in funding to federal agencies which was for the purpose of checking the COVID-19 pandemic and increasing the age limits for work requirements on certain federal safety net programs, like food stamps.
The Congressional Budget Office forecasted a deficit reduction of $1.5 trillion over the next decade, though that amount did not have some “agreed-upon adjustments” that would increase federal spending in the coming months, taken into consideration.
According to the deputy director of the National Economic Council, Bharat Ramamurti, the bill takes the possibility of default off the table, protects entitlement programs like social security and Medicare, and helps preserve economic progress from the last few years.
“We think we were able to secure some of our key priorities, and if the speaker thinks that he got what he’s wanted to get out of this, that’s why you see bipartisan support for the deal both in the House and hopefully the Senate,” Ramamurti said.
The bill will now move to the Democratic-controlled Senate, for approval on Monday then to the president’s desk, to keep the U.S. from defaulting. Senate leaders on both sides of the aisle have said they aim to pass it as quickly as possible, ideally by the end of the week.