Politics

WASHINGTON (Reuters) – The U.S. Senate on Thursday passed bipartisan legislation backed by President Joe Biden that lifts the government’s $31.4 trillion debt ceiling, averting what would have been a first-ever default.

The Senate voted 63-36 to approve the bill that had been passed on Wednesday by the House of Representatives, as lawmakers raced against the clock following months of partisan bickering between Democrats and Republicans.

The Treasury Department had warned it would be unable to pay all its bills on June 5 if Congress failed to act by then.

“We are avoiding default tonight,” Senate Majority Leader Chuck Schumer said on Thursday as he steered the legislation through his 100-member chamber.

Biden praised Congress’ timely action. “This bipartisan agreement is a big win for our economy and the American people,” the Democratic president said in a statement, adding that he will sign it into law as soon as possible. He said he would make an additional statement on Friday at 7 p.m. EDT (2300 GMT).

Biden was directly involved in negotiations on the bill with House Speaker Kevin McCarthy.

While this bitter battle has ended, Senate Republican Leader Mitch McConnell wasted no time flagging the next budget fight.

“In the coming months, Senate Republicans will continue working to provide for the common defense and control Washington Democrats’ reckless spending,” he said in a statement.

McConnell was referring to 12 bills Congress will work on over the summer to fund government programs in the fiscal year beginning Oct. 1, which will also carry out the broad instructions of the debt limit bill.

Treasury Secretary Janet Yellen, meanwhile, issued some pointed advice saying, “I continue to strongly believe that the full faith and credit of the United States must never be used as a bargaining chip,” as Republicans did over the past several months.

Before the final vote, senators tore through nearly a dozen amendments – rejecting all of them during a late-night session in anticipation of Monday’s deadline.

With this legislation, the statutory limit on federal borrowing will be suspended until Jan. 1, 2025. Unlike most other developed countries, the United States limits the amount of debt the government can borrow, regardless of any spending allocated by the legislature.

“America can breathe a sigh of relief,” Schumer said in remarks to the Senate.

‘TIME IS A LUXURY’

Republicans had blocked passage of any debt limit increase until they locked in some wide-ranging spending cuts in a move they said would begin addressing a rapidly escalating national debt.

Biden instead pushed for tax increases on the wealthy and corporations to help address the growing debt. Republicans refused to consider any sort of tax hikes.

Both parties walled off the sprawling Social Security and Medicare retirement and healthcare programs from cuts, and McCarthy refused to consider reducing spending on the military or veterans.

That left a somewhat narrow band of domestic “discretionary” programs to bear the brunt of spending cuts. In the end, Republicans won about $1.5 trillion in reductions over 10 years, which may or may not be fully realized. Their opening bid was for $4.8 trillion in savings over a decade.

Treasury technically hit its limit on borrowing in January. Since then it has been using “extraordinary measures” to patch together the money needed to pay the government’s bills.

Biden, Yellen and congressional leaders all acknowledged that triggering a default for lack of funds would have serious ramifications. Those included sending shock waves through global financial markets, possibly triggering job losses and a recession in the United States and raising families’ interest rates on everything from home mortgages to credit card debt.

The Republican-controlled House passed the bill on Wednesday evening in a 314-117 vote. Most of those who voted against the bill were Republicans.

“Time is a luxury the Senate does not have,” Schumer said on Thursday. “Any needless delay or any last-minute holdups would be an unnecessary and even dangerous risk.”

Among the amendments debated were ones to force deeper spending cuts than those contained in the House-passed bill and stopping the speedy final approval of a West Virginia energy pipeline.

COBBLED OVER WEEKS

Republican Senator Roger Marshall offered an amendment to impose new border controls as high numbers of immigrants arrive at the U.S.-Mexico border. His measure, he said, would “put an end to the culture of lawlessness at our southern border.”

The Senate defeated the amendment, however. Democrats said it would strip away protections for child migrants and rob American farmers of needed workers.

Some Republicans also wanted to beef up defense spending beyond the increased levels contained in the House-passed bill.

In response, Schumer said the spending caps in this legislation would not constrain Congress in approving additional money for emergencies, including helping Ukraine in its battle against Russia.

“This debt ceiling deal does nothing to limit the Senate’s ability to appropriate emergency supplemental funds to ensure our military capabilities are sufficient to deter China, Russia and our other adversaries, and respond to ongoing and growing national security threats, including Russia’s evil ongoing war of aggression against Ukraine,” Schumer said.

The bill was cobbled together over weeks of intensive negotiations between senior aides for Biden and McCarthy.

The main argument was over spending for the next couple of years on discretionary programs such as housing, environmental protections, education and medical research that Republicans wanted to cut deeply.

The nonpartisan Congressional Budget Office estimated the bill would save $1.5 trillion over 10 years. That is below the $3 trillion in deficit reduction, mainly through new taxes, that Biden proposed.

The last time the United States came this close to default was in 2011. That standoff hammered financial markets, led to the first-ever downgrade of the government’s credit rating and pushed up the nation’s borrowing costs.

There was less drama this time as it became clear last week that Biden and McCarthy would find a deal with enough bipartisan support to get through Congress.

(Reporting by Richard Cowan, David Morgan, Moira Warburton and Gram Slattery; Editing by Scott Malone, Alistair Bell, Diane Craft, Kieran Murray and William Mallard)

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WASHINGTON (Reuters) -The U.S. Department of Justice has closed its investigation into former Vice President Mike Pence without filing any charges related to classified documents found in his Indiana home, a department official said on Friday.

The department notified Pence through a letter, the official added.

Representatives for Pence, who served under former Republican President Donald Trump, did not immediately respond to a request for comment.

After revelations of classified material found at Trump’s Florida residence after he left office, the National Archives called on former presidents and vice presidents to make checks for any material that should be in the government’s possession.

A lawyer for Pence had notified authorities about the discovery of records with classified markings, prompting an FBI search for records at his Indianapolis residence this year.

NBC and CNN reported the closing of the probe earlier Friday.

Pence’s spokesman has said the former vice president has “fully cooperated” with the probe and Pence himself has publicly acknowledged what he called a mistake.

A Justice Department special counsel, Jack Smith, is investigating Trump’s handling of classified materials since leaving office in January 2021.

A separate special counsel was appointed to conduct an investigation after U.S. President Joe Biden reported finding some classified material in his possession.

Both Biden and Trump are seeking the presidency in the 2024 election. Pence is expected to announce his candidacy next week.

(Reporting by Timothy Reid; writing by Susan Heavey; Editing by Bill Berkrot and Doina Chiacu)

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By Richard Cowan and Gram Slattery

WASHINGTON (Reuters) -The U.S. Senate is on track to pass a bill to lift the government’s $31.4 trillion debt ceiling late on Thursday, Democratic Majority Leader Chuck Schumer announced, adding, “We are avoiding default tonight.”

All 100 senators reached an agreement to debate up to 11 amendments and then promptly vote on passing the legislation, before a Monday deadline for suspending the debt limit through Jan. 1, 2025. If the plan succeeds, Congress would quickly send the bill to President Joe Biden to sign, averting a catastrophic default, Schumer said.

The House passed the bill on Wednesday, as both chambers raced against a Monday deadline.

“America can breathe a sigh of relief, a sigh of relief because in this process we are avoiding default,” Schumer said in remarks to the Senate.

The expectation is that the amendments will not garner enough support to be attached to the legislation. If any one of them does, the measure would have to be sent back to the House of Representatives, which could increase the possibility of a first-ever default on Washington’s debt payments.

Schumer and his Republican counterpart Minority Leader Mitch McConnell vowed to do all they could to speed along the bill negotiated by Biden and Republican House Speaker Kevin McCarthy, which would suspend the debt limit, essentially temporarily removing it, in exchange for a cap on spending.

The Treasury Department has warned it will be unable to pay all its bills on June 5 if Congress fails to act.

Treasury technically hit the statutory $31.4 trillion limit on borrowing in January. Since then it has been utilizing “extraordinary measures” to patch together the money needed to pay the government’s bills.

For the past five months Democrats and Republicans have jousted over the debt limit. Republicans, who control the House with a narrow majority, have insisted that wide-ranging cuts in government spending be part of any deal raising the debt limit.

Meantime, Biden, Treasury Secretary Janet Yellen and congressional leaders all acknowledged that triggering a debt default for lack of funds would have serious ramifications.

Schumer drove that point home even at this late hour as he steered the bill toward final passage.

A default, he said, “would almost certainly cause another recession. It would be a nightmare for our economy and millions of American families. It would take years, years to recover from.”

‘TIME IS A LUXURY’

The Republican-controlled House passed the bill on Wednesday evening in a 314-117 vote. McCarthy lost the support of dozens of his fellow Republicans.

“Time is a luxury the Senate does not have,” Schumer said on Thursday. “Any needless delay or any last-minute holdups would be an unnecessary and even dangerous risk.”

Biden’s Democrats control the Senate by a thin 51-49 margin. The chamber’s rules require 60 votes to advance most legislation, meaning at least nine Republican votes are needed to pass most bills, including the debt ceiling deal.

Among the amendments to be debated are ones to force deeper spending cuts than those contained in the House-passed bill and to stop the speedy final approval of a West Virginia energy pipeline.

Republican Senator Roger Marshall offered an amendment to impose new border controls amid high numbers of immigrants arriving at the U.S.-Mexico border. His measure, he said, would “put an end to the culture of lawlessness at our southern border.”

The Senate defeated the amendment, however, after Democrats said it would strip away protections for child migrants and rob American farmers of needed workers.

Republicans also want to beef up defense spending beyond the increased levels contained in the House-passed bill.

Schumer stated that the spending caps contained in this legislation will not constrain Congress in approving additional money for emergencies, including helping Ukraine in its battle against Russia.

“This debt ceiling deal does nothing to limit the Senate’s ability to appropriate emergency supplemental funds to ensure our military capabilities are sufficient to deter China, Russia, and our other adversaries, and respond to ongoing and growing national security threats, including Russia’s evil ongoing war of aggression against Ukraine,” Schumer said.

The bill was cobbled together over weeks of intensive negotiations between surrogates for Biden and McCarthy. The main argument was over spending for the next couple years on “discretionary” programs, such as housing, environmental protections, education and medical research that Republicans wanted to cut deeply while seeking increases in funding for the military, veterans and possibly border security.

In the end, the Republican spending-cut proposals were significantly pared.

The nonpartisan Congressional Budget Office estimated the bill would save $1.5 trillion over 10 years. That is below the $4.8 trillion in savings that Republicans aimed for in a bill they passed through the House in April, and also below the $3 trillion in deficit that Biden’s proposed budget would have reduced the deficit over that time through new taxes.

The last time the United States came this close to default was in 2011. That standoff hammered financial markets, led to the first-ever downgrade of the government’s credit rating and pushed up the nation’s borrowing costs.

(Reporting by Richard Cowan, David Morgan, Moira Warburton and Gram Slattery; Editing by Scott Malone, Alistair Bell and Diane Craft)

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By Richard Cowan and Gram Slattery

WASHINGTON (Reuters) – The U.S. Senate is on track to pass a bill to lift the government’s $31.4 trillion debt ceiling late on Thursday, Democratic Majority Leader Chuck Schumer announced, adding, “We are avoiding default tonight.”

All 100 senators reached an agreement to debate up to 11 amendments and then promptly vote on passing the legislation, before a Monday deadline for suspending the debt limit through Jan. 1, 2025. If the plan succeeds, Congress would quickly send the bill to President Joe Biden to sign, averting a catastrophic default, Schumer said.

The House passed the bill on Wednesday.

“America can breathe a sigh of relief, a sigh of relief because in this process we are avoiding default,” Schumer said in remarks to the Senate.

The expectation is that the amendments will not garner enough support to be attached to the legislation. If any one of them does, the measure would have to be sent back to the House of Representatives, which could increase the possibility of a first-ever default on Washington’s debt payments.

Schumer and his Republican counterpart Minority Leader Mitch McConnell vowed to do all they could to speed along the bill negotiated by Biden and Republican House Speaker Kevin McCarthy, which would suspend the debt limit, essentially temporarily removing it, in exchange for a cap on spending.

The Treasury Department has warned it will be unable to pay all its bills on June 5 if Congress fails to act.

(Reporting by Richard Cowan, David Morgan, Moira Warburton and Gram Slattery; Editing by Scott Malone, Alistair Bell and Diane Craft)

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WASHINGTON (Reuters) -President Joe Biden tripped and fell after handing out the last diploma at a graduation ceremony at the U.S. Air Force Academy in Colorado on Thursday, but got up quickly and walked back to his seat.

The 80-year-old U.S. president fell forward, caught himself with his hands, then got up on one knee while helped by three people. He walked back to his seat unassisted.

After Biden was helped up, he pointed behind him, seeming to indicate that he had tripped over a sandbag used to hold the teleprompter in place. He mingled with other officials afterward, smiling and giving a “thumbs up” sign.

Upon returning to the White House, Biden joked to reporters, “I got sandbagged.”

The fall came after a commencement address Biden delivered to a flag-waving audience, warning graduates they will enter service in an increasingly unstable world, citing challenges from Russia and China.

Biden, the oldest person to hold the Oval Office, is running for re-election in 2024. His leading Republican opponent, Donald Trump, turns 77 this month.

Trump, asked about Biden’s fall during an Iowa rally, said, “He actually fell down? Well I hope he wasn’t hurt.”

Trump added, “You gotta be careful about that,” even if you have to “tip-toe down a ramp.”

In June 2020, Trump’s slow, careful descent of a ramp at the U.S. Military Academy at West Point had some observers questioning his agility. “The last thing I was going to do is ‘fall’ for the Fake News to have fun with,” Trump had tweeted afterward.

This February, doctors declared Biden healthy and fit for duty after a physical examination, noting the president does not drink alcohol or use tobacco and exercises “at least” five times a week.

Last June, Biden fell as he was dismounting his bicycle, after snaring a foot in a toe clip, but was uninjured.

Polls show Americans are concerned about anyone over age 75 becoming president. Data from the U.S. Centers for Disease Control and Prevention show that falls among adults 65 and older are the leading cause of fatal injury for that age group.

(Reporting by Steve Holland and Jeff Mason; Writing by Doina Chiacu and Heather Timmons; Editing by Tim Ahmann, David Gregorio and Leslie Adler)

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WASHINGTON (Reuters) – The U.S. Senate is debating a bill brokered by President Joe Biden and House Speaker Kevin McCarthy that lifts the government’s $31.4 trillion debt ceiling while imposing spending caps and cuts on Biden’s plan to boost funding for the IRS to audit wealthy Americans, among other things.

The Republican-controlled House of Representatives passed the bill on Wednesday evening in a bipartisan 314-117 vote.

Here’s a summary of the deal:

A CAP ON DISCRETIONARY SPENDING

The deal would suspend the $31.4 trillion debt ceiling until Jan. 1, 2025, allowing the U.S. government to pay its bills.

In exchange, non-defense discretionary spending would be “roughly flat” at current year levels in 2024, “when factoring in agreed upon appropriations adjustments,” according to White House officials.

They estimated that total non-defense discretionary spending excluding benefits for veterans would total $637 billion for the 2024 fiscal year, down marginally from $638 billion the year before. That total would also increase by 1% in 2025.

A BREATHER FOR THE 2024 ELECTION

The debt limit extension lasts past 2024, meaning Congress would not need to address the deeply polarizing issue again until after the November 2024 presidential election.

Still, tough conversations about how to allocate money under the new spending caps will need to take place in Congress this year.

INCREASED DEFENSE SPENDING

The deal would boost total defense spending to $886 billion, in line with Biden’s 2024 budget spending proposal.

That is about a 3% increase from the $858 billion allocated in the current budget for the Pentagon and other defense-related programs in other agencies.

MOVING SPECIAL IRS FUNDING

Biden and Democrats secured $80 billion for a decade in new funding to help the Internal Revenue Service enforce the tax code for wealthy Americans in last year’s Inflation Reduction Act, a move the administration said would yield $200 billion in additional revenue over the next 10 years.

The IRS earmarked the money for hiring thousands of new agents, and the extra tax revenue they generated was expected to offset a slew of climate-friendly tax credits.

The new legislation and subsequent appropriations would shift $10 billion in each of calendar years 2024 and 2025 in funding away the Internal Revenue Service. But administration officials believe the IRS can make do in the near term since it was funded over a 10-year period.

COVID CLAWBACK

Biden and McCarthy agreed to claw back much of the unused COVID relief funds as part of the budget deal. The estimated amount of unused funds is between $50 billion and $70 billion.

White House officials said some funds would be retained, including items related to vaccine funding, housing assistance and support for Native Americans.

WORK REQUIREMENTS

Biden and McCarthy battled fiercely over imposing stricter work requirements on low-income Americans for being eligible for food and healthcare programs.

No changes were made to Medicaid in the deal, but the agreement would impose new work requirements on some low-income people who receive food assistance under the program known as SNAP up to age 54, instead of up to age 50.

STUDENT LOANS

The new bill would require the Biden administration to follow through with a plan to end the current pause on student loan repayments by late August.

But it did not strike down Biden’s plan to forgive $430 billion in student debt, which the Supreme Court is currently reviewing.

‘PAYGO’

Republicans secured a budgeting mechanism known as “PAYGO,” which is short for pay-as-you-go, that says new government agency actions affecting revenues and spending should be offset by savings.

But the law would give Biden’s budget director the opportunity to issue waivers to that requirement and it would also limit judicial review of the decisions.

ENERGY PERMITTING

Biden and McCarthy agreed to tweak rules to make it easier for pipeline projects – including fossil-fuel based ones – to gain permit approval, but did not make any changes to help solar and wind projects get access to the nation’s power grid.

The legislation does include swifter approval of a project backed by U.S. Senator Joe Manchin. The long-delayed $6.6 billion Mountain Valley natural gas pipeline would get streamlined approval under the legislation.

(Reporting by Jarrett Renshaw, Steve Holland Richard Cowan, Trevor Hunnicutt and Moira Warburton; Editing by Deepa Babington, Jacqueline Wong and Diane Craft)

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(Reuters) – Former President Donald Trump and Florida Governor Ron DeSantis traded barbs on Thursday over who could most quickly fix the economy and reform government agencies as the battle between the top two Republican contenders grew increasingly acrimonious.

Trump, who currently holds a large lead over DeSantis in a distant second in polls on the 2024 Republican nomination, also took critical shots at other candidates lower down in the rankings, suggesting they exit the party’s primary.

Trump’s comments were made to Fox News host Sean Hannity in a town hall in Clive, Iowa. Hannity is one of Trump’s strongest media allies, and he set him up to blast opponents including DeSantis, who he predicted would slip further in the polls.

“You know, I really go after the one who is second and I think the one who is second has gone down so much and so rapidly that I don’t think he’s going to be second that much longer. I think he’s going to be third or fourth,” Trump said.

Earlier on Thursday, DeSantis and Trump had exchanged insults over their plans to right the economy and reform government bureaucracy, with the Florida governor criticizing Trump for not getting the job done during his time in the White House.

“Why didn’t he do it in his first four years?” DeSantis quipped to reporters during a campaign event in New Hampshire.

DeSantis argued that it was better for voters to elect someone who could serve two terms – or eight years in office – because that is how long it would take to successfully finish a task that was not fully defined by either candidate.

“If he needs eight years don’t vote for him. I’ll have that this country hopping in six months,” Trump, who can only serve one more term, sniped back.

During the Fox News town hall, Trump was asked about what he made of the growing Republican field, including former vice president Mike Pence and former New Jersey governor Chris Christie who are both expected to enter the race next week.

“I don’t know why people are doing it. They’re at 1%. Some are at zero,” he said, referring to candidates with low poll numbers.

Remarking on former Arkansas governor Asa Hutchinson, Trump said: “nobody knows who the hell he is.”

(reporting by Nathan Layne, Timothy Reid and Eric Beech; Editing by Lincoln Feast.)

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By David Morgan

WASHINGTON (Reuters) – Kevin McCarthy earned his stripes as Republican speaker of the U.S. House of Representatives on Wednesday, navigating fierce hardline opposition to pass a debt ceiling bill containing federal spending limits that President Joe Biden for months vowed to resist.

Six months after he endured 15 humiliating floor votes just to be elected speaker, McCarthy proved capable of dragging Biden into negotiations over spending and other Republican priorities, and then marshalling two-thirds of his often fractious House Republican majority to enact bipartisan legislation.

“It’s not how you start, it’s how you finish,” McCarthy told reporters after the vote, repeating one of his comments from the January night he was finally confirmed as speaker. The House approved by a 314-117 margin the bill, which lifts the government’s $31.4 trillion debt ceiling in exchange for cutting non-defense discretionary spending and stiffening work requirements in assistance programs.

Yet it was a bruising victory for McCarthy. The bill gained 165 votes from Democrats, outnumbering the 149 from members of McCarthy’s own Republican party.

The bill now goes to the narrowly Democratic-controlled Senate, which must enact it and get it to Biden’s desk by June 5 to avoid a crippling U.S. default.

Republican Representative Dusty Johnson, a McCarthy ally who helped craft the Republican debt-ceiling legislation that buttressed the speaker in negotiations, said the vote proved wrong Democratic predications that the 58-year-old Californian would have little chance of holding his caucus together.

“They said he would never become speaker, and of course they were wrong. They said he would never be able to manage the floor effectively and we haven’t had a single bill fail,” Johnson said in an interview. “They said he wouldn’t be able to cut a deal with the president, and they were wrong about that.”

McCarthy has so far succeeded in passing the bill without drawing direct verbal attacks from former President Donald Trump, who urged Republicans to push for a default if they were not able to extract sufficient concessions from Democrats.

Trump, who is seeking a return to the White House in 2024, had blasted top Senate Republican Mitch McConnell for agreeing to raise the debt ceiling during Biden’s first year in office. McConnell largely stayed in the background during these talks, which began to move forward after Biden agreed to one-on-one negotiations on May 9.

Avoiding Trump’s ire appears to have protected McCarthy’s standing with Republican voters nationally, some 44% of whom told a Reuters/Ipsos poll in May that they approve of his job performance, notably higher than McConnell’s 29% approval rate.

The bill approved by the House on Wednesday would suspend the debt limit – essentially meaning that it no longer applies – through Jan. 1, 2025. That sets the stage for another showdown in the weeks following the 2024 presidential election.

APRIL GAMBIT

Republican lawmakers and analysts say McCarthy’s masterstroke in getting Biden to the negotiating table was his decision to bring a debt ceiling bill to the floor and pass it in April with only the support of his own party members.

Up to that point, Biden had refused McCarthy’s requests to negotiate over the debt ceiling, insisting that House Republicans enact their own budget for fiscal 2024 as a prerequisite for spending talks.

But in getting the April measure passed, House Republicans became the only body in Washington that had acted to raise the debt ceiling.

“Once the House passed a bill, ‘no negotiations’ was a clearly unsustainable place to be,” said Rohit Kumar, a former top aide to Senate Republican leader Mitch McConnell who is now co-leader of PwC’s national tax office in Washington.

The White House, for its part, contends that the talks between Biden and McCarthy were not a negotiation on the debt ceiling.

“The debt ceiling had to be lifted, and it had to be lifted for a long period of time,” White House budget director Shalanda Young told a Tuesday press conference. “You see this bill lift the debt ceiling until 2025. You can call it a negotiation; I call it a declarative statement.”

House Republicans say McCarthy has succeeded as speaker, because of an inclusive leadership style, cultivating support from a majority of caucus members by working through major party caucuses, known as the “Five Families,” a reference to the warring organized crime clans of “The Godfather” movie.

“Speaker McCarthy’s done an incredible job,” said Representative Marjorie Taylor Greene, a member of the hardline Republican House Freedom Caucus. “And I think he’s proved over and over again that he defies the odds, and he also defies people’s expectations.”

McCarthy also expanded his influence through trusted friends and longtime associates such as Representatives Patrick McHenry and Garret Graves, who became his lead negotiators with the White House.

POSSIBLE THREAT

But McCarthy is not quite out of the woods. After stirring the ire of hardline conservatives who decried the compromise bill as a sellout, he could face the prospect of ouster at the hands of any single member.

One of the conditions he agreed to in January to win the speakership was allowing for any one member to call for a “motion to vacate the chair,” in essence a vote on whether to depose the speaker.

Senior members of the Freedom Caucus have said they would consider next steps in coming weeks.

One of their number, Ralph Norman, said McCarthy should have forced Democrats to accept the House-passed bill.

“I think it weakens him. Whether it’s permanent or temporary, I don’t know,” Norman said.

But Norman said he would not support an immediate effort to oust McCarthy as speaker, adding “To threaten to kick him out now, that’s not right.”

A similar threat triggered the resignation of former House Speaker John Boehner in 2015.

“This is where the honeymoon can definitely end,” said Republican strategist Ron Bonjean, a one-time aide to former House Speaker Dennis Hastert.

Asked this week whether he expects to keep his speakership, McCarthy told a reporter: “What do you think? You guys ask me all the time, and I’m still standing.”

His allies say they will defend him against any potential threat to his position.

“We’ll have to deal with the internal politics of a hard-fought fight. Tempers are short and emotions are raw right now. But we’ll deal with it,” Representative Kelly Armstrong, a McCarthy adviser, told Reuters.

(Reporting by David Morgan, additional reporting by Steve Holland and Jason Lange; Editing by Scott Malone and Suzanne Goldenberg)

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By Richard Cowan and David Morgan

WASHINGTON (Reuters) – The U.S. Senate on Thursday was set to take up a bill to lift the government’s $31.4 trillion debt ceiling, with just four days left to pass the measure and send it to Democratic President Joe Biden to sign, averting a catastrophic default.

The top Democrat and Republican in chamber vowed to do all they could to speed along the bill negotiated by Biden and Republican House of Representatives Speaker Kevin McCarthy, which would suspend the debt limit until Jan. 1, 2025 in exchange for a cap on spending.

It remained to be seen whether any members of their respective caucuses, particularly hardline Republicans angry the bill did not include deeper spending cuts, would use the Senate’s arcane rules to try to slow down its passage.

The Treasury Department warned it will be unable to pay all its bills on June 5 if Congress fails to act.

The Republican-controlled House passed the bill on Wednesday evening in a 314-117 vote. McCarthy lost the support of dozens of his fellow Republicans.

“Once this bill reaches the Senate, I will move to bring it to the floor as soon as possible,” Majority Leader Chuck Schumer said on Wednesday.

His counterpart, Senate Republican Leader Mitch McConnell, also signaled that he would work for fast passage, saying, “I’ll be proud to support it without delay.”

Biden’s Democrats control the Senate by a thin 51-49 margin. The chamber’s rules require 60 votes to advance most legislation, meaning at least nine Republican votes are needed to pass most bills, including the debt ceiling deal.

The measure faces opposition from the right, with some Republicans angry the spending cuts weren’t deeper, and left, with some Democrats opposed to new work requirements imposed on some antipoverty programs. But most lawmakers acknowledged they could not stomach the prospect of barreling ahead into default.

Schumer and McConnell were working behind the scenes to dissuade opponents from erecting procedural barriers that would delay passage.

Typically on important, contentious bills such as this one, the two Senate leaders find a way to allow just a couple rebelling senators from each party to offer amendments under fast-track procedures, knowing they will lack the votes for passage.

“Unless you want to stay here through the weekend, I think some of our guys are going to need to get their votes” on their amendments, said Senator John Thune, the chamber’s No. 2 Republican.

Any Senate changes to the bill at this stage would mean it would have to go back to the House for final passage, a delay that could make the first-ever U.S. government default a reality.

Republican Senator Rand Paul who regularly seeks such last-minute amendments, told CBS News on Wednesday he will not employ parliamentary procedures to delay action.

But another Republican, Mike Lee, has said he may try to slow it down. On Wednesday he vowed to vote against the bill, but did not reiterate his threat to try to delay it. Chastising House Republican negotiators for agreeing to what he sees as a weak compromise with Democrats, Lee lamented, “With Republicans like these, who needs Democrats?”

The bill was cobbled together over weeks of intensive negotiations between surrogates for Biden and House Speaker Kevin McCarthy. The main argument was over spending for the next couple years on “discretionary” programs, such as housing, education and medical research that Republicans wanted to cut deeply while seeking increases in funding for the military, veterans and possibly border security.

The nonpartisan Congressional Budget Office estimates would save $1.5 trillion over 10 years. That is below the $4.8 trillion in savings that Republicans aimed for in a bill they passed through the House in April, and also below the $3 trillion in deficit that Biden’s proposed budget would have reduced the deficit over that time through new taxes.

The last time the United States came this close to default was in 2011. That standoff hammered financial markets, led to the first-ever downgrade of the government’s credit rating and pushed up the nation’s borrowing costs.

A default would trigger widespread financial consequences, triggering a recession that would hit everyone from poor people reliant on government aid to senior citizens expecting Social Security retirement checks and even wealthy Wall Street investors with fat portfolios in stocks and bonds.

(Reporting by Richard Cowan and David Morgan; Editing by Scott Malone and Lincoln Feast.)

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By David Morgan

WASHINGTON (Reuters) – Kevin McCarthy earned his stripes as Republican speaker of the U.S. House of Representatives on Wednesday, navigating fierce hardline opposition to pass a debt ceiling bill containing federal spending limits that President Joe Biden for months vowed to resist.

Six months after he endured 15 humiliating floor votes just to be elected speaker, McCarthy proved capable of dragging Biden into negotiations over spending and other Republican priorities, and then marshalling two-thirds of his often fractious House Republican majority to enact bipartisan legislation.

“Keep underestimating us and we’ll keep proving to the American public that we’ll never give up,” McCarthy told reporters after the vote.

The bill, approved by a 314-117 margin, lifts the government’s $31.4 trillion debt ceiling in exchange for cutting non-defense discretionary spending and stiffening work requirements in assistance programs.

Yet it was a bruising victory for McCarthy. The bill gained 165 votes from Democrats, outnumbering the 149 from members of McCarthy’s own Republican party.

The bill now goes to the narrowly Democratic-controlled Senate, which must enact it and get it to Biden’s desk by June 5 to avoid a crippling U.S. default.

Republican Representative Dusty Johnson, a McCarthy ally who helped craft the Republican debt-ceiling legislation that buttressed the speaker in negotiations, said the vote proved wrong Democratic predications that the 58-year-old Californian would have little chance of holding his caucus together.

“They said he would never become speaker, and of course they were wrong. They said he would never be able to manage the floor effectively and we haven’t had a single bill fail,” Johnson said in an interview. “They said he wouldn’t be able to cut a deal with the president, and they were wrong about that.”

McCarthy has so far succeeded in passing the bill without drawing direct verbal attacks from former President Donald Trump, who urged Republicans to push for a default if they were not able to extract sufficient concessions from Democrats.

Trump, who is seeking a return to the White House in 2024, had blasted top Senate Republican Mitch McConnell for agreeing to raise the debt ceiling during Biden’s first year in office. McConnell largely stayed in the background during these talks, which began to move forward after Biden agreed to one-on-one negotiations on May 9.

Avoiding Trump’s ire appears to have protected McCarthy’s standing with Republican voters nationally, some 44% of whom told a Reuters/Ipsos poll in May that they approve of his job performance, notably higher than McConnell’s 29% approval rate.

The bill approved by the House on Wednesday would suspend the debt limit – essentially meaning that it no longer applies – through Jan. 1, 2025. That sets the stage for another showdown in the weeks following the 2024 presidential election.

APRIL GAMBIT

Republican lawmakers and analysts say McCarthy’s masterstroke in getting Biden to the negotiating table was his decision to bring a debt ceiling bill to the floor and pass it in April with only the support of his own party members.

Up to that point, Biden had refused McCarthy’s requests to negotiate over the debt ceiling, insisting that House Republicans enact their own budget for fiscal 2024 as a prerequisite for spending talks.

But in getting the April measure passed, House Republicans became the only body in Washington that had acted to raise the debt ceiling.

“Once the House passed a bill, ‘no negotiations’ was a clearly unsustainable place to be,” said Rohit Kumar, a former top aide to Senate Republican leader Mitch McConnell who is now co-leader of PwC’s national tax office in Washington.

The White House, for its part, contends that the talks between Biden and McCarthy were not a negotiation on the debt ceiling.

“The debt ceiling had to be lifted, and it had to be lifted for a long period of time,” White House budget director Shalanda Young told a Tuesday press conference. “You see this bill lift the debt ceiling until 2025. You can call it a negotiation; I call it a declarative statement.”

House Republicans say McCarthy has succeeded as speaker, because of an inclusive leadership style, cultivating support from a majority of caucus members by working through major party caucuses, known as the “Five Families,” a reference to the warring organized crime clans of “The Godfather” movie.

“Speaker McCarthy’s done an incredible job,” said Representative Marjorie Taylor Greene, a member of the hardline Republican House Freedom Caucus. “And I think he’s proved over and over again that he defies the odds, and he also defies people’s expectations.”

McCarthy also expanded his influence through trusted friends and longtime associates such as Representatives Patrick McHenry and Garret Graves, who became his lead negotiators with the White House.

POSSIBLE THREAT

But McCarthy is not quite out of the woods. After stirring the ire of hardline conservatives who decried the compromise bill as a sellout, he could face the prospect of ouster at the hands of any single member.

One of the conditions he agreed to in January to win the speakership was allowing for any one member to call for a “motion to vacate the chair,” in essence a vote on whether to depose the speaker.

Senior members of the Freedom Caucus have said they would consider next steps in coming weeks.

One of their number, Ralph Norman, said McCarthy should have forced Democrats to accept the House-passed bill.

“I think it weakens him. Whether it’s permanent or temporary, I don’t know,” Norman said.

But Norman said he would not support an immediate effort to oust McCarthy as speaker, adding “To threaten to kick him out now, that’s not right.”

A similar threat triggered the resignation of former House Speaker John Boehner in 2015.

“This is where the honeymoon can definitely end,” said Republican strategist Ron Bonjean, a one-time aide to former House Speaker Dennis Hastert.

Asked this week whether he expects to keep his speakership, McCarthy told a reporter: “What do you think? You guys ask me all the time, and I’m still standing.”

His allies say they will defend him against any potential threat to his position.

“We’ll have to deal with the internal politics of a hard-fought fight. Tempers are short and emotions are raw right now. But we’ll deal with it,” Representative Kelly Armstrong, a McCarthy adviser, told Reuters.

(Reporting by David Morgan, additional reporting by Steve Holland, Gram Slattery and Jason Lange; Editing by Scott Malone and Suzanne Goldenberg)

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