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With the prospect of a debt default looming just over the horizon, the House of Representatives tonight passed compromise legislation to raise the debt ceiling.
The House voted in favor of the bill by a margin of 269-161 after a dramatic day of legislative wrangling on Capitol Hill. Although the compromise was announced last night, the leaders of both parties had to spend much of today trying to win over their respective caucuses.
The bill is essentially a modified version of John Boehner’s (R-OH) plan, which passed the House last week. It would immediately raise the debt ceiling by $400 billion, while allowing President Obama to order a $500 billion increase in the fall, unless both houses of Congress vote to block it. It also imposes spending cuts of $1 trillion by setting ten-year caps on the budgets of Cabinet agencies.
A further debt ceiling increase of up to $1.5 trillion will be granted if Congress can offset it through additional spending cuts. A special bipartisan committee of both houses will be responsible for proposing these cuts, but if the committee cannot agree or Congress does not enact their proposals, the White House will be empowered to order across-the-board cuts, including reductions in defense spending and farm subsidies. However, the debt ceiling increase could still go through if Congress approves a balanced-budget amendment to the Constitution and sends it to the states for ratification.
Neither side ended up truly winning the day. While Obama and the Democrats got their wish for a debt ceiling increase that will see them through the 2012 election, they will not be able to raise taxes on the wealthy in order to reduce the debt. And while the Republicans succeeded in wringing deep spending cuts from the Democrats, the agreed-upon cuts are not as deep as the ones the House passed last week. It is also far from certain that a balanced-budget amendment will actually go to the states since it is no longer required in order to raise the debt ceiling.
Like most compromises, this one was not to everyone’s liking. Presidential hopeful Rep. Michele Bachmann (R-MN) announced her intention to vote against the bill, claiming that it did not cut spending enough. “Someone has to say no, I will,” she said.
At the other end of the political spectrum, the co-chair of the Congressional Progressive Caucus, Rep. Raúl M. Grijalva (D-AZ), also lambasted the bill. “This deal weakens the Democratic Party as badly as it weakens the country. We have given much and received nothing in return,” he said.
The Senate will likely take up the bill tomorrow, where it is almost certain to pass, given the bipartisan show of support in the House and the fact that a debt default could be just around the corner if they balk.