WASHINGTON, D.C. – The U.S. Senate here averted a looming debt crisis on June 1, voting 63 to 36 to suspend the statutory $31.4 trillion debt ceiling limit until 2025.
That late Thursday evening vote gives the U.S. Treasury breathing room to borrow money to pay the federal government’s bills, including monthly Social Security payments, Medicare expenses and Veteran’s benefits.
Earlier in the day, Sen. Mitt Romney (R-UT) spoke with northern Utah reporters via ZOOM, explaining his support for the Fiscal Responsibility Act crafted by House Speaker Kevin McCarthy (R-CA) and President Joe Biden during budget negotiations last weekend.
“It’s not perfect,” Romney acknowledged. “It has flaws. There are lots of ways it could be better.
“But in a divided Congress that is part Democrat and part Republican, it’s a compromise that is better than the alternatives.”
Those alternatives ranged from the federal government defaulting on its debts — a possibility which Romney branded an absolute catastrophe – to giving Biden a debt ceiling increase bill without demanding any concessions.
Romney listed the strong points of the Fiscal Responsibility Act as including the largest spending reduction in U.S. history, some reforms of the environmental permitting constrains on domestic energy projects and efforts to shed light on the cost of presidential regulations.
That latter provision of the bill is where Romney and colleague Sen. Mike Lee (R-UT) differed on the debt deal.
To hold Biden accountable for the full cost of executive orders and regulations, the agreement established a first-ever Administrative Pay-As-You-Go statute, requiring that the White House must offset its expenses.
But the bill’s fine print also provides a loophole, allowing the White House to waive that requirement as necessary.
“If that waiver is deemed necessary to make sure President Biden’s agenda is carried forward, we’re going to use that authority,” according to recent comments by Shalanda Young, the director of the Office of Management and Budget.
Lee had offered an amendment to the Fiscal Responsibility Act removing Section 265, voiding that loophole.
But Lee’s amendment, like those of most of his Republican colleagues, was batted down during a day of backroom negotiations Thursday. Any substantive changes to the Fiscal Responsibility Act would have required sending it back to the House for another floor vote.
The biggest threat to the bill came from several Republican defense hawks and top appropriators led by Sen. Lindsey Graham (R-S.C.) who demanded a commitment from leadership to take up a supplemental defense spending bill.
They said the 3 percent defense spending increase allowed in the debt limit deal for the coming fiscal year, and a 1 percent increase allowed the following year, amount to cuts after adjusting for inflation.
Senate leaders agree to that demand, also promising Sen. Patty Murray (D-WA) additional funding for border security and disaster relief.
According to estimates from the Congressional Budget Office, the saving in federal spending as a result of the debt ceiling agreement will range from 2.1 to 1.5 trillion over six years.
Romney calls that a remarkable achievement.
“The Democratic and Republican party leadership, meaning the current president and former President Donald Trump, both said that they didn’t want to touch entitlements, meaning Medicare, Social Security and so forth,” Romney explained.
“That’s two-thirds of all federal spending,” he added. “Then there’s another one-sixth that is the defense budget, which is actually being increased.
“So the only portion of the federal budget that Speaker McCarthy was able to reduce was one-sixth (for discretionary spending). To be able to save $1.5 trillion without touching five-sixth of the budget is quite an accomplishment.”
The Fiscal Responsibility Act is now on its way to the White House, where Biden is certain to sign it prior to the government’s self-imposed June 5 deadline.
Cute name. In this country the rich get richer during a pandemic. The rich get richer when there is a war. The rich get richer during an energy crisis. The rich get richer during a housing crisis.