US House Passes Bill on Raising Borrowing Limit, Curbing Government Spending

WASHINGTON: US lawmakers voted Wednesday to pass the Fiscal Responsibility Act, in order to raise the national borrowing limit and limit government spending, just days before a major payment default is due.

The bill was passed with 314 votes being cast in favour of the bill, while 117 were cast against it. The bill will now be moved to the senate for a vote.

The bill is the result of a pact struck between Washington's warring Republicans and Democrats after weeks of intense negotiations and deals in the backroom.

The measure to suspend the debt ceiling through 2024 was hammered out between Democratic President Joe Biden and the Republicans in the House of Representatives, in a move aimed at cutting government spending next year.

"Passing the Fiscal Responsibility Act is a crucial first step for putting America back on track," said Speaker Kevin McCarthy, the top Republican in Congress.

"It does what is responsible for our children, what is possible in divided government, and what is required by our principles and promises."

The 314-117 vote was hailed by President Joe Biden as a "critical step" to protecting the economic recovery in the country after the pandemic, which had been achieved through "bipartisan compromise."

With the Treasury expecting to run out of the money as soon as Monday, a drama over the past few days on Capitol Hill came to an end with the bill’s passage.

Help from dozens of Democrats was needed by the Republican majority in the House, to fend off a right-wing rebellion as 71 conservatives had voted no, and advance the deal to the Senate, which is expected to pass the bill by the end of the week.

With the total debt at more than $31 trillion, the proposed spending limits for 2024 and 2025 would cut nearly $1.5 trillion from projected federal budget deficits over the next decade, according to estimates by the nonpartisan Congressional Budget Office.

The vote capped weeks of on and off talks between the McCarthy and Biden teams, while the Democrats accused Republicans of holding the economy ‘hostage’ by carping on spending cuts along with the hike in the borrowing cap.

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