Blog - House Passes Debt Ceiling Bill

After failing Thursday night, Speaker John Boehner [R, OH-8] brought his debt ceiling bill back to the floor Friday afternoon with an amendment appealing to far-right Republicans, and passed it. The final vote was 218-210, with zero Democrats voting in favor and 22 Republicans voting “no.”

The bill, S.627,  would give the President new authority to raise the debt ceiling by $900 billion without approval from Congress in exchange for $756 billion in unspecified spending cuts over 10 years and the creation of a special congressional committee, or “Super Congress,” to propose more deficit-cutting proposals in the future. That $900 billion increase is designed to get us through the end of the year. To raise the debt ceiling again next year, Obama would have to get new approval from Congress unless two conditions are met. The Super Congress would have to result in passage of at least $1.6 trillion more in deficit savings, and Congress would have had to have approved a Balanced Budget Amendment to the Constitution. If neither of those conditions are met, it’s back to another debt ceiling debate just like the one we’re in now.

Now that the House Republican plan has passed, and with 5 days left until the debt ceiling is surpassed, what happens next?

Senate Majority Leader Harry Reid [D, NV] has said that he plans to hold a vote on a motion to table the House Republicans’ bill later this evening. With every Senate Democrat having declared publicly that they will vote against it, it is going to fail. Besides, it has a presidential veto threat against it already.

After that, it’s onto the Reid bill. As it’s currently written, Reid’s bill would allow the debt ceiling to be raised by more than the Boehner bill — $2.7 trillion, enough to last through 2012 — and would cut more spending. According to the Congressional Budget Office, Reid’s bill would decrease deficits by $2.2 trillion over 10 years through $751 in unspecified spending cuts, cutting funding for the wars in Iraq and Afghanistan, lowering Agricultural subsidies, auctioning off spectrum, and more. The Reid bill would also create a “Super Congress,” and it specifies that they should look at revenue, not just cuts, for reducing deficits. Importantly, though, it does not premise a second debt ceiling increase on the outcome of the Super Congress, as the Boehner plan does.

The bill will most likely be altered before the final Senate vote on passage to make it more palatable to Republicans. WIth so little time left before the default date (August 2) whatever bill Reid sends back to the House pretty much has to be his final offer. Reid has not filed cloture on his bill yet, so jumping through all of the procedural hurdles required to get it to a final vote will take until Tuesday, August 2. At that point, once the Senate passes it, there will be time for an up-or-down vote in the House on agreeing to the Senate bill, but not much else.

According to @sussancrabtree, House Deputy Whip Rep. Tom Cole [R, OK-4] has said that any compromise bill that comes back to the House must be able to attract at least half of the House Republican caucus. If it doesn’t, Boehner presumably will not call it up for a vote, and the U.S. will default on its debt for the first time ever. Now, it’s not clear that Boehner will stick to that rule. Exactly what happens when the Senate bill goes back to the House on Tuesday is still the big open question. Passing something without sufficient Republican support wouldn’t be great for Boehner from a political perspective. It could even cost him his speakership next session if the Republicans hold the House. But the way things are looking, that may be the only way to prevent a default.