WASHINGTON, D.C. — The Senate on Thursday passed a bill to suspend the nation’s debt limit until January 1, 2025, averting a first-ever U.S. default on its debt.
The bill, which passed by a vote of 63-36, now heads to President Joe Biden’s desk for his signature.
The debt limit suspension takes the threat of default off the table until after the 2024 presidential election. In addition to addressing the debt limit, the bill also caps non-defense spending, expands work requirements for some food stamp recipients, and claws back some COVID-19 relief funds.
The bill includes the following provisions:
- Suspends the federal debt limit through January 1, 2025.
- Increases the debt limit on January 2, 2025, to accommodate the obligations issued during the suspension period.
- Establishes new discretionary spending limits for FY2024 and FY2025 that are enforced with sequestration (i.e., automatic spending cuts).
- Changes the limits to 1% below the FY2023 base funding levels if a continuing resolution is in effect on or after January 1, 2024, or on or after January 1, 2025, because all 12 regular appropriations bills were not enacted by the end of the prior year.
- Rescinds certain unobligated funds that were provided to address COVID-19 and to the Internal Revenue Service.
- Provides funding for the Department of Veterans Affairs Cost of War Toxic Exposure Fund.
- Provides funding for the Department of Commerce Nonrecurring Expenses Fund.
- Provides statutory authority through 2024 for the requirement for agencies that propose certain administrative actions that will increase direct spending to also propose at least one administrative action that will decrease direct spending by at least the same amount (commonly known as administrative pay-as-you-go rules).
- Terminates the suspension of federal student loan payments.
- Expands the work requirements for the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families (TANF) program.
- Expedites the permitting process for certain energy projects.
However, the bill is not without ongoing criticism. Some MAGA Republicans have argued that it does not go far enough to address the underlying problem of government spending. Others have criticized the inclusion of provisions that they view as unrelated to the debt limit, such as the work requirements for SNAP and TANF.
Despite these criticisms, the passage of the debt limit suspension bill keeps the wheels of the U.S. economy turning.