House Speaker Kevin McCarthy (R-Calif.) during a Wednesday night news conference after the House passed the debt ceiling bill, called the Fiscal Responsibility Act. Photo: Drew Angerer/Getty Images
The House voted Wednesday to pass a bill raising the debt ceiling until 2025 in exchange for measures to cut the budget deficit.
Why it matters: The bill's passage puts the U.S. on track to avert a debt default — which Treasury Secretary Janet Yellen projected could happen in a matter of days.
Driving the news: The bipartisan agreement between President Biden and House Speaker Kevin McCarthy (R-Calif.) passed 314-117, with 149 Republicans and 165 Democrats voting for it.
What they're saying: Biden said in a statement after the vote on Wednesday night that the House had taken "a critical step forward to prevent a first-ever default and protect our country’s hard-earned and historic economic recovery."
- He said the bill was a bipartisan compromise that's "good news" for the American people and the U.S. economy. "I urge the Senate to pass it as quickly as possible so that I can sign it into law," Biden added.
Meanwhile, McCarthy said after the vote: "Tonight we all made history. ... Is it everything I wanted? No. But sitting with one House, with a Democratic Senate and a Democratic president who didn't want to meet with us — I think we did pretty dang good for the American public."
Details: The agreement would raise the debt ceiling until January 2025, essentially punting the issue until after the 2024 election. It also includes a number of provisions geared toward deficit reduction:
- Spending: Keeps non-defense discretionary spending in the 2024 budget roughly steady at 2023 levels and caps growth in the 2025 budget at 1%.
- Defense: Codifies the Biden administration's request for $886 billion for the Pentagon, a roughly 3% increase.
- Supplemental Nutrition Assistance (SNAP): Expands food assistance work requirements to able-bodied adults until the age of 54, but exempts the homeless, veterans and some former foster youth. The work requirements phase in over three years and sunset in 2030.
- Temporary Assistance for Needy Families (TANF): Slightly reduces state grants for direct cash assistance to families in poverty.
- Permitting reform: Streamlines the environmental review process to speed up approval for new energy projects.
- PAYGO: Mandates the executive branch to offset significant expenditures with spending reductions ("pay-as-you-go"), but allows them to waive the requirement in certain cases.
- COVID aid: Rescinds roughly $27 billion in unspent COVID aid to public health, infrastructure and disaster relief programs, to be reallocated for n0n-defense discretionary spending.
By the numbers: The bill would reduce budget deficits by $1.5 trillion over the next 10 years, according to a report from the Congressional Budget Office.
- Counterintuitively, according to the CBO, the number of SNAP recipients would be increased by 78,000 due to the new exemptions, increasing spending on the program by $2.1 billion.
What we're watching: Senate Majority Leader Chuck Schumer (D-N.Y.) has pledged to bring the bill to the floor for a vote as soon as possible, saying on Wednesday morning: "It is imperative that we avoid a default."
- Senate Minority Leader Mitch McConnell (R-Ky.) in a statement called on senators after the House bill passed Wednesday night "to pass this agreement without delay."
Go deeper... Scoop: Jeffries, McCarthy cut side-deal to save debt ceiling bill
- Listen to the Axios Today podcast, where host Niala Boodhoo shares what you need to know about the House voting to pass the debt ceiling bill.
Editor's note: This article has been updated with comment from President Biden, House Speaker Kevin McCarthy, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell.