Senate Scrambles to Get to Final Debt Limit Vote

Senate Scrambles to Get to Final Debt Limit Vote

Schumer said the Senate will stay until the job is done.
By Yuval Rosenberg and Michael Rainey
Thursday, June 1, 2023

Welcome to June! We could be mere hours away from an end to this latest round of debt ceiling drama, as the Senate appears poised to follow the House and pass the bipartisan deal to raise the borrowing limit, cap spending and avoid a default. While Senate leaders reportedly hope to get a final vote tonight, they spent much of the day scrambling to get the agreement of all 100 senators. Here’s what’s happening.

Senate Scrambles to Get to a Final Vote on Debt Limit Deal

The path to raising the debt limit is taking a few late twists and turns. After the House on Wednesday night easily cleared the bill negotiated by House Speaker Kevin McCarthy and President Joe Biden to raise the debt limit and cap spending, Senate leaders are working to speed the deal to a final vote. But while the legislation is all but certain to pass, the timing of a Senate vote remains unclear as negotiations continue to ensure all 100 senators agree to expedite the process.

“The Senate will stay in session until we send a bill avoiding default to President Biden’s desk. We will keep working until the job is done,” Senate Majority Leader Chuck Schumer of New York said Thursday on the Senate floor. “Time is a luxury the Senate does not have if we want to prevent a default. June 5 is less than four days away.”

For the Senate to be able to fast-track the bill and pass it before Monday’s deadline, all senators must agree — and they can’t amend the bill because that would send it back to the House for another vote with too little time before the deadline. “At this point, any needless delay or any last-minute holdups would be an unnecessary and even dangerous risk, and any change to this bill that forces us to send it back to the House would be entirely unacceptable. It would almost guarantee default,” Schumer said.

The holdup: Senators from both parties have raised concerns about the deal.

Defense hawks including Republican Sens. Lindsey Graham of South Carolina and Dan Sullivan of Alaska are looking to boost national security spending, which is set at $886 billion for fiscal year 2024, the level Biden requested, under the deal. Graham reportedly is seeking a separate supplemental aid package for Ukraine later this year. And GOP appropriators reportedly are asking for a promise from Schumer to bring up the 12 annual appropriations bills.

Republican Sen. Mike Lee of Utah has offered an amendment that would strike the House bill provision allowing the director of the Office of Management and Budget to unilaterally waive the requirement to find offsets for any administration policy action that increases direct spending by more than $100 million a year. Republican Rand Paul of Kentucky wants bigger spending cuts. And Virginia Democrat Tim Kaine is pushing to strip out a measure in the House bill that expedites the approval of permits for the Mountain Valley Pipeline, a controversial natural gas project that stretches from West Virginia to North Carolina and had been held up by legal challenges.

Sen. John Thune of South Dakota, the Republican whip, told reporters he expects about six to 10 amendments to be taken up.

What the House vote means: The House easily cleared the bill Wednesday night in a bipartisan 314-117 vote that saw 165 Democrats and 149 Republicans back the deal. The overwhelming vote total represents a win for McCarthy, who got the support of more than two-thirds of Republicans, more than meeting the requirement that a majority of the majority back his deal.

Still, McCarthy will face criticism from conservatives upset that his compromise fell short of the full GOP wish list and galled that the bill got more votes from Democrats than Republicans. Conservatives will be discussing a move to oust McCarthy in the coming days. And Rep. Chip Roy of Texas, a leading hardliner, said he plans to sit down with McCarthy next week to air his grievances, according to CNN.

The bottom line: It’s not done quite yet — but it could be very soon.

Chart of the Day: About Those Budget Cuts

While the Congressional Budget Office estimates that the debt and budget deal currently working its way through Congress would reduce discretionary spending by more than $1.3 trillion from 2023 through 2023, many analysts say the savings will likely be far smaller. As Howard Gleckman of the Tax Policy Center notes, the agreement has no enforcement mechanism beyond the first two years and will likely be weakened by side deals and accounting gimmicks. As a result, the budgetary savings could be limited to those achieved in the first two years of the bill, or about $170 billion, as shown in the chart below. Reduced interest payments and compounding over time would bump that figure up a bit, but in the end the budget agreement could produce a “fiscal path that barely diverts from the one the nation already is on,” Gleckman says.

“Once Republicans agreed to take Social Security, Medicare, military spending, and veterans benefits off the table and refused to consider tax increases of any kind, they had no real way to achieve significant deficit reduction,” Gleckman writes. “House Republicans left themselves with no choice but to focus all their cuts on only about one-seventh of non-interest federal spending. And many of those programs have powerful constituencies, even in the GOP caucus.”


Most Medicaid Disenrollments Have Been Procedural: Analysis

As states start enforcing more restrictive pre-pandemic rules in their Medicaid programs, data collected by the health care foundation KFF shows considerable variation across states in the percentage of participants being disenrolled, with thousands of people losing health care for procedural reasons such as failing to complete paperwork.

Not all states have started the disenrollment process, and not all of those that have are releasing data, but the 11 states analyzed by KFF — Florida, Arkansas, Indiana, Arizona, New Hampshire, Virginia, South Dakota, Iowa, Idaho, Pennsylvania and Nebraska — have removed more than 500,000 people from their Medicaid programs so far. About half of those disenrollments were in Florida alone.

The rate of disenrollment in each state varies considerably. At the high end, Florida has removed 54% of beneficiaries reviewed so far, and Arkansas has removed 51%. At the other extreme, Pennsylvania and Virginia have removed just 10% of those reviewed. The median disenrollment rate in the 9 states that provide sufficient data is 24%.

Of particular concern is the number of people who are being removed from Medicaid for procedural reasons, which occurs when states cannot determine the eligibility of a beneficiary, typically due to incomplete paperwork. In both Indiana and Arkansas, more than 88% of disenrollments have been procedural. In Florida, 82.2% of disenrollments are procedural, while in Iowa, the number is 54.4%.

Overall, the data suggest that most people who have been removed from Medicaid so far have been disenrolled for procedural reasons.

While some people who have been disenrolled may no longer be eligible to remain on Medicaid, KFF analysts say many probably are. “High procedural disenrollments raise concerns particularly in light of recent findings from a KFF survey that nearly two-thirds of current Medicaid enrollees said they did not have a change in income or circumstance in the past year that would make them ineligible for Medicaid,” KFF analysts wrote Tuesday. “While it is possible that some people are not completing the renewal process because they have other coverage, the survey findings suggest many of the people whose coverage was terminated for procedural reasons in the past month likely remain eligible.”

Washington Post Columnist Catherine Rampell said the data point to a “scandalous” degree of government ineptitude. “Based on available data, majority of Americans losing their Medicaid coverage as part of the national ‘unwinding’ are being disenrolled for paperwork reasons -- *not* because they were actually reassessed & determined ineligible for coverage,” Rampell tweeted Thursday. “These people are losing insurance not because their incomes rose, or they aged out of a program. Rather, they’re losing coverage for pointless bureaucratic reasons, like state sending mail to [the] wrong address.”


Number of the Day: $40 Billion

As part of the debt ceiling deal between House Speaker Kevin McCarthy and President Joe Biden, a pause on student loan repayments that has been in place since the Covid-19 pandemic will be terminated after August 30. Around 43 million Americans who were allowed to suspend payments on their federal loans will have to resume them as of September 1. That could result in a hit to borrowers’ spending power — and, as a result, a blow to the economy. Joseph Brusuelas, chief economist for RSM US, estimates that resuming these student loan payments could lead to a $40 billion decrease in household disposable income. A Credit Karma survey from March and April found that of 1,006 people with student loans, “43% of borrowers do not feel financially stable and 21% had no savings.”

On a related note, the Senate on Thursday passed a bill to block Biden’s student loan forgiveness program, which would cancel up to $20,000 in debt for borrowers. The House had previously passed the bill, which will now head to Biden’s desk. The president has said he will veto it. The Supreme Court is also expected to rule on the constitutionality of Biden’s plan later this summer.

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