WASHINGTON -- Fending off a U.S. default, the Senate gave final approval late Thursday to a debt ceiling and budget cuts package, grinding into the night to wrap up work on the bipartisan deal and send it to President Joe Biden's desk to become law before the fast-approaching deadline.
The compromise package negotiated between Biden and House Speaker Kevin McCarthy leaves neither Republicans nor Democrats fully pleased with the outcome. But the result, after weeks of hard-fought budget negotiations, shelves the volatile debt ceiling issue that risked upending the U.S. and global economy until 2025 after the next presidential election.
Approval in the Senate on a bipartisan vote -- 63-36, with four Democrats voting against it and 17 Republicans voting for it -- reflected the overwhelming House tally the day before, relying on centrists in both parties to pull the Biden-McCarthy package to passage.
Senate Majority Leader Charles Schumer said the bill's passage means "America can breathe a sigh of relief."
He said, "We are avoiding default."
Biden said in a statement after the vote that senators from both parties "demonstrated once more that America is a nation that pays its bills and meets its obligations -- and always will be."
He said he would sign the bill into law as soon as possible. "No one gets everything they want in a negotiation, but make no mistake: this bipartisan agreement is a big win for our economy and the American people," the president said. The White House said he would address the nation about the matter at 6 p.m. CDT today.
Fast action was vital if Washington hoped to meet next Monday's deadline, when the Treasury has said the U.S. will start running short of cash to pay its bills, risking a devastating default. Raising the nation's debt limit, now $31.4 trillion, would ensure Treasury could borrow to pay already incurred U.S. debts.
In the end, the debt ceiling showdown was a familiar high-stakes battle in Congress, a fight taken on by McCarthy and powered by a hard-right House Republican majority confronting the Democratic president with a new era of divided government in Washington.
Refusing a once-routine vote to allow the nation's debt limit to be lifted without concessions, McCarthy brought Biden's White House to the negotiating table to strike an agreement that forces spending cutbacks aimed at curbing the nation's deficits.
Overall, the 99-page bill restricts spending for the next two years, suspends the debt ceiling into January 2025 and changes some policies, including imposing new work requirements for older Americans receiving food aid and greenlighting an Appalachian natural gas line that many Democrats oppose.
It bolsters funds for defense and veterans, cuts back new money for Internal Revenue Service agents and rejects Biden's call to roll back Trump-era tax breaks on corporations and the wealthy to help cover the nation's deficits. It imposes automatic 1% cuts if Congress fails to approve its annual spending bills.
After the House overwhelmingly approved the package late Wednesday, Senate Republican leader Mitch McConnell signaled he too wanted to waste no time ensuring it became law.
Touting its budget cuts, McConnell said Thursday, "The Senate has a chance to make that important progress a reality."
Having remained largely on the sidelines during much of the Biden-McCarthy negotiations, several senators insisted on debate over their ideas to reshape the package. But making any changes at this stage would almost certainly derail the compromise, and none were approved.
Instead, senators dragged through rounds of voting late into the night rejecting the various amendments, but making their preferences clear. Conservative Republican senators wanted to include further cuts on spending, while Democratic Sen. Tim Kaine of Virginia sought to remove the Mountain Valley Pipeline approval.
The energy pipeline is important to Sen. Joe Manchin, D-W.Va., and he defended the development running through his state, saying the country cannot run without the power of gas, coal, wind and all available energy sources.
But, offering an amendment to strip the pipeline from the package, Kaine argued it would not be fair for Congress to step into a controversial project that he said would also course through his state and scoop up lands in Appalachia that have been in families for generations.
Defense hawks led by Sen. Lindsey Graham of South Carolina complained strongly that military spending, though boosted in the deal, was not enough to keep pace with inflation -- particularly as they eye supplemental spending that will be needed this summer to support Ukraine against the war waged by Russian President Vladimir Putin.
"Putin's invasion is a defining moment of the 21st century," Graham argued from the Senate floor. "What the House did is wrong."
They secured an agreement from Schumer, which he read on the floor, stating that the debt ceiling deal "does nothing" to limit the Senate's ability to approve other emergency supplemental funds for national security, including for Ukraine, or for disaster relief and other issues of national importance.
For weeks negotiators labored late into the night to strike the deal with the White House, and for days McCarthy had worked to build support among skeptics.
Tensions had run high in the House the night before as hard-right Republicans refused the deal. Ominously, the conservatives warned of possibly trying to oust McCarthy over the issue.
But Biden and McCarthy assembled a bipartisan coalition, with Democrats ensuring passage on a robust 314-117 vote. All told, 71 House Republicans broke with McCarthy to reject the deal.
"We did pretty dang good," McCarthy, R-Calif., said afterward.
MILITARY FUNDING DISPUTE
The Senate votes on the proposed changes appeared to be the final action in a monthslong drama as lawmakers raced to send legislation to Biden and avoid a default. It followed a series of private meetings Thursday to resolve a last-minute dispute over Pentagon funding.
The voting began after a day of uncertainty as a handful of Republicans complained that the deal -- negotiated between Biden and McCarthy without input from the Senate -- would underfund the military, and demanded a commitment that their concerns would be addressed before it could be passed.
By evening, Senate officials and Graham, who had been a chief critic of the Pentagon spending levels, said leaders in both parties had negotiated language that reassured him and other defense hawks sufficiently to back the bill, clearing the way for final votes.
"It does not fix this bill totally, but it is a march in the right direction," Graham said.
It would increase Pentagon spending to $886 billion for next year, a 3% raise, but GOP backers of higher spending for the military noted that that would not keep pace with inflation and argued that the package fell far short of what was needed.
"To my House colleagues, I can't believe you did this," Graham said earlier in the day, accusing the architects of the measure of undercutting the military at a time of rising threats from Russia and China. "This budget is a win for China."
Graham and others insisted that at a minimum, they wanted a commitment that Congress would later move on an additional funding bill to beef up the spending, although this would in effect reduce the savings Republicans had hoped to achieve through their debt limit deal.
"We know that this budget is not adequate to the global threats that we face," said Sen. Susan Collins of Maine, the senior Republican on the full Appropriations Committee. "An emergency supplemental must be coming our way."
The opposition erupted almost immediately after Schumer opened the Senate on Thursday morning by warning that the chamber needed to move quickly and make no changes to the agreement to clear it for Biden's signature by Monday. He admonished lawmakers not to engage in brinkmanship before the so-called X-date of Monday, when Treasury Secretary Janet Yellen has said the government will default without action by Congress.
"Time is a luxury the Senate does not have if we want to prevent default," Schumer said. "June 5 is less than four days away. At this point, any needless delay or any last-minute holdups would be an unnecessary and even dangerous risk."
Even as the deal migrated across the Capitol, the effects of the debt limit continued to pinch. The Treasury announced Thursday that it would delay auctions of three- and six-month "bills" -- short-term debt that the government no longer has room to take on until the borrowing cap is suspended.
As part of the deal to move forward with final votes on the bill, multiple senators secured votes on proposed changes. Schumer was determined to defeat all of them, as any alteration would force the measure back to the House, where no action would be likely to occur before the default deadline.
"Any change to this bill that forces us to send it back to the House would be entirely unacceptable," he said. "It would almost guarantee default."
Information for this article was contributed by Lisa Mascaro, Kevin Freking, Stephen Groves, Farnoush Amiri, Mary Clare Jalonick and Zeke Miller of The Associated Press; and Carl Hulse of The New York Times.