Crisis averted: Senate passes bill to stop debt default and sends to Biden's desk

WASHINGTON ? The Senate Thursday night approved a bipartisan agreement to avoid a catastrophic default on the nation’s debt, sending the package of spending cuts and debt limit suspension to the White House for President Joe Biden's signature.

The Senate acted with uncharacteristic swiftness, racing to complete the legislation before Monday, the earliest the federal government could be unable to pay all its bills.

"America can breathe a sigh of relief," said Senate Majority Leader Chuck Schumer, D-N.Y. "For all the ups and downs and twists and turns it took to get here, it is so good for this country that both parties have come together at last to avoid default."

Calling the package a "big win for our economy and the American people," Biden said in a statement he looks forward to signing the bill "as soon as possible."

The White House announced Biden will address the nation at 7 p.m. Friday.

Some senators demanded votes on amendments in exchange for not dragging out debate, but none were approved.

The 63-36 vote came a day after the House passed "The Fiscal Responsibility Act" by a wide margin. The House holdouts included far-right Republicans who said the spending cuts didn't go far enough. House liberals who voted against the bill criticized the legislation for expanding work requirements for food stamps, expediting permitting for oil and gas projects, and capping future spending.

In the Senate, 31 Republicans and five liberals ? including Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass. ? opposed the bill.

The legislation, which was negotiated by Biden and House Speaker Kevin McCarthy, R-Calif., would suspend the limit on how much the federal government can borrow until Jan. 2, 2025.

It would also keep nondefense spending discretionary spending – which does not include Social Security and Medicare – roughly flat for 2024 and raise it by 1% in 2025. About $30 billion in unspent coronavirus relief money would be rescinded. Billions of dollars in recently approved funding for the IRS to improve customer service and go after tax cheats would be redirected to other areas, reducing the amount of taxes that would've been collected with full funding.

The nonpartisan Congressional Budget Office projected the bill will cut $1.5 trillion in federal spending over the next 10 years.

Some Senate Republicans complained the deal doesn't include enough defense funding since the increase is below the rate of inflation.

"The party of Ronald Reagan would never allow inflation to reduce defense capabilities," said Sen. Lindsey Graham, R-S.C.

Schumer emphasized the deal doesn't prevent Congress from considering emergency spending requests for Ukraine or for other national security needs. Such emergency spending doesn't count against budget restrictions but it still increases the deficit.

"I know a strong bipartisan majority of senators stands ready to receive and process emergency funding requests from the administration," he said.

Sen. Tim Kaine, D-Va., had hoped to strip out of the package expedited approval for a controversial national gas pipeline running from northwestern West Virginia to southern Virginia that's backed by Sen. Joe Manchin, D-W.Va.

"No every day person gets this deal," said Kaine, the only Democrat to offer an amendment. It was defeated 30-69.

Some senators complained that they hadn’t had enough say in shaping the deal.

“We weren’t a party to the agreement,” said Sen. John Cornyn, R-Texas. “Why should we be bound by the strict terms of that agreement?”

But with the clock ticking toward default, enough senators didn't want to risk having to send an amended bill back to the House for another vote.

“I would suggest it’s very irresponsible for us to change something here,” said Sen. Debbie Stabenow, D-Mich. “The House is gone. We’re going to go into default.”

The Treasury Department has been using "extraordinary measures" to pay the nation's bills since mid-January, when the nation bumped up against the $31.381 trillion limit on how much can be borrowed.

The Treasury borrows money to pay all its bills because the government spends more than it collects in revenues. The amount the government can borrow is set in statute, making that a separate process from the decisions made in annual spending bills and policy measures that determine how much funding goes out the door and how much is collected in taxes and other revenues.

More: Who voted against the debt ceiling bill in the House? These 117 lawmakers opposed it

This article originally appeared on USA TODAY: Senate passes debt ceiling deal to prevent June 5 default