The deal is approved by the US House of Representatives; The Senate will vote on

United States lawmakers on Wednesday voted to raise the national borrowing limit as an important first step to avert a catastrophic default, green-lighting a pact struck between Washington’s warring factions after weeks of brinkmanship and fraught with backroom deals.

The measure, designed by Democratic President Joe Biden and Republicans in the House of Representatives, suspends the debt ceiling until 2024, cutting government spending slightly next year.

Speaker of the House Kevin McCarthy (R-CA) speaks to reporters as he heads to the final vote on the Fiscal Accountability Act of 2023 at the US Capitol on May 31, 2023 in Washington, DC.  Somodeville Chip/Getty Images/AFP

Speaker of the House Kevin McCarthy (R-CA) speaks to reporters as he heads to the final vote on the Fiscal Accountability Act of 2023 at the US Capitol on May 31, 2023 in Washington, DC. Somodeville Chip/Getty Images/AFP

Speaker of the House Kevin McCarthy (R-CA) speaks to reporters as he heads to the final vote on the Fiscal Accountability Act of 2023 at the US Capitol on May 31, 2023 in Washington, DC. Somodeville Chip/Getty Images/AFP

“Passing the Fiscal Responsibility Act is an important first step in getting America back on track,” said Speaker Kevin McCarthy, the Republican congressional leader.

“He does what is responsible for our children, what is possible in a divided government and what is required in accordance with our principles and promises.”

Biden hailed the 314-117 vote as a “critical step” to defend the nation’s post-pandemic economic recovery, which was achieved through a “bipartisan compromise.”

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The drama ended with several busy days on Capitol Hill when the Treasury was expected to run out of money as early as Monday.

The Republican majority in the House of Representatives needed help from dozens of Democrats to fend off an uprising on the right – 71 conservatives voted no – and push the deal to the Senate, which is expected to follow suit by the end of the week.

McCarthy’s deputies have spent the last hours churning out votes as senior Democrats have vowed that their members will put the country’s finances ahead of the temptation to stuff the opposition’s nose in blood.

“The consequences of not meeting the deadline will reverberate around the world, and it will take years to recover from them,” Chuck Schumer, leader of the Democratic-led Senate, warned ahead of the vote in the lower house.

“Remember, a default will almost certainly trigger another recession, drive up costs, kill millions of jobs – hardworking people will be fired from their jobs through no fault of their own.”

Leadership challenge?

The non-partisan Congressional Budget Office estimates that the proposed spending caps for 2024 and 2025 will cut nearly $1.5 trillion from the projected federal budget deficit over the next decade. The total debt is over $31 trillion.

The vote came as a result of weeks of negotiation between the McCarthy and Biden teams, with Democrats accusing Republicans of holding the economy “hostage” by pushing for spending cuts due to a higher borrowing ceiling.

Fiscal hawks to the right of Congress have accused the White House of pushing unsustainable spending programs and say discussions about the future budget should be a condition of increasing the cap that covers the debt already taken on.

However, the high drama seen in the recent debt ceiling and budget clashes was absent as House Minority Leader Hakim Jeffreys was open that his members would provide enough votes that the bill was never in jeopardy.

But for McCarthy, it was a major blow, whose job would be in jeopardy if a majority of its members rejected the pact, only to see it pushed through anyway.

Winning 149 Republican votes – roughly two-thirds of his faction – allows McCarthy to show strength in his bid to resist criticism from the Republican right, who accuse him of capitulating to the White House without demanding more drastic cuts.

Some hardliners openly speculated about using the new power granted by McCarthy as part of his bid to become speaker in January to call for an early vote to remove him.

“Toon Villain”

House Democratic Whip Katherine Clark called the vote a “buyout” that Republicans demanded, offering Americans “crushing cuts or we [would] lose eight million jobs overnight.”

“It’s hard to accept because it looks so much like a cartoon villain. But unlike the cartoon, the American people won’t snap back when you drop this economic anvil on their heads,” she said.

The bill would need 60 votes in the 100-member Senate, and party bosses have urged their members to cooperate in a quick vote they hope to take as early as Thursday night.

Defense hawks have raised concerns about the $886 billion defense spending cap, the amount Biden has requested.

Meanwhile, Senators Jeff Merkley and Bernie Sanders – a Democrat and independent who votes with the party – released separate statements saying they could not “in good conscience” support a bill that cuts key federal programs while increasing military spending and requiring do not pay extra taxes from billionaires

Republican Senate leader Mitch McConnell, who largely conceded to McCarthy in the talks, is expected to provide at least a dozen votes, with most of the 51-member Democratic majority blocked.