House passes debt ceiling bill with spending cuts in test of GOP unity

Washington — The House on Wednesday passed a bill that would raise the debt ceiling and slash trillions of dollars in government spending, delivering House Speaker Kevin McCarthy a victory in his efforts to pressure the White House to begin negotiations ahead of a fast-approaching deadline to avoid a default.

The House voted 217 to 215 to pass the Limit, Save, Grow Act of 2023, with all but four Republican members voting in favor. The Republicans who voted against the bill were Reps. Ken Buck of Colorado, Andy Biggs of Arizona, Tim Burchett of Tennessee and Matt Gaetz of Florida. No Democrats supported its passage.

The measure would lift the debt ceiling by $1.5 trillion or until the end of March 2024, whichever comes first, and cut spending to the tune of $4.5 trillion. 

Those cuts mean it's dead on arrival in the Democratic-controlled Senate and President Biden has vowed to veto it. But the bill was an early test of McCarthy's ability to unite a fractious Republican caucus, and he hopes the vote will give him leverage to prompt the president to open talks. "The president can no longer ignore by not negotiating," McCarthy said after the vote.

Mr. Biden threw cold water on that notion earlier in the day, reiterating his position that lifting the debt limit is "not negotiable." Democrats insist Republicans should support increasing the debt limit with no strings attached, and that any negotiations over government spending should occur as part of the normal budget process. Failing to lift the limit would force the U.S. to default on its debts, a disastrous scenario that could occur as early as June without congressional action.

"I'm happy to meet with McCarthy, but not on whether or not the debt limit gets extended," Mr. Biden told reporters after a news conference with South Korea's president. 

In a statement after the vote, the White House called on Republicans to "act immediately and without conditions to avoid default and ensure that the full faith and credit of the United States is not put at risk." 

Senate Minority Leader Mitch McConnell praised McCarthy on Wednesday, saying he "has done an excellent job of unifying our side." He urged McCarthy and Mr. Biden "to come together and solve the problem." 

The speaker said Senate Majority Leader Chuck Schumer should bring his own proposal to the Senate floor. 

"Sen. Schumer, if he thinks he's got a plan, put it on the floor, see if you can pass it and then we can go to conference," McCarthy said.

The bill's prospects among House Republicans appeared uncertain as late as Tuesday, spurring GOP leaders to work into the early morning hours to adjust the legislation to win over a handful of Republican holdouts whose opposition could have torpedoed the measure. The tweaks to the original bill preserved ethanol tax credits that would've been repealed and moved up implementation of more stringent work requirements for recipients of food stamps and Medicaid by one year, from 2025 to 2024. 

The revisions sought to address concerns from a group of Midwestern Republicans, specifically members of the Iowa delegation, who pushed back on the initial bill's unwinding of the tax incentives. Changes to the deadline for stricter work requirements came after Gaetz said that doing so would be an "essential element" to winning his vote, although he ultimately voted against it.

The changes assuaged enough Republicans to allow it to narrowly clear the House. McCarthy could afford just a handful of defections, given the GOP's slim majority.

Ahead of the vote, Rep. Mark Alford, a Missouri Republican, told reporters that McCarthy "came back with a proposal that we were willing to accept and move forth with."

"We've got to get this over the finish line. We've got to get this over to the Senate," he said.

GOP Rep. Derrick Orden of West Virginia said he was "swayed publicly" Tuesday night by McCarthy and the broader Republican conference.

"It is our responsibility to get the speaker of the House Kevin McCarthy to the table with President Biden," he told reporters. "The speaker of the House has a burden to bring the president of the United States to a place where he will make sure that he is protecting our progenitors and our progeny."

Rep. Nancy Mace of South Carolina initially planned to vote no because the bill doesn't balance the budget, but switched her position after meeting with McCarthy.

"He listened to my concerns, he's willing to work with us on our concerns about balancing the budget," she said. "That was meaningful, that was productive, and I believe it's going to be fruitful in the near future."

While the bill is aimed at jump-starting negotiations over the debt limit, the president has repeatedly said he will only accept a measure that lifts the debt ceiling without conditions.

The House GOP's plan would freeze spending at levels adopted in fiscal year 2022 and cap future federal spending increases at 1% annually for the next decade. It also claws back unspent federal COVID-19 relief funds, revokes some of the $80 billion for the Internal Revenue Service included in the Inflation Reduction Act and tightens the work requirements for Medicaid and food stamp recipients.

The bill rolls back some of the president's signature policies, including his plan to forgive up to $20,000 in student loan debt — two challenges to the debt relief program are pending before the Supreme Court — and climate provisions enacted through the Inflation Reduction Act, Democrats' signature health care, tax and climate package.

The U.S. hit its borrowing limit of nearly $31.4 trillion in mid-January, forcing the Treasury Department to use "extraordinary measures" to avoid defaulting on its debt. The Congressional Budget Office has estimated those extraordinary measures could be exhausted as early as July, though some analysts say the deadline could be reached as early as June, depending on the money collected by the IRS as Americans file their taxes.

— Rebecca Kaplan, Ellis Kim and Alan He contributed to this report.