URGENT Update on Debt Ceiling Drama

URGENT Update on Washington D.C. Debt Limit Talks From ARA on Behalf of Repo Alliance

The past 12-24 hours have been packed with important news related to the Fiscal Responsibility Act (FRA), all of which are favorable toward its passage. They are on track to avoid default, which would wreak havoc on the auto finance market.

The House Rules Committee, which prepares legislation for floor consideration, passed the FRA by a 7-6 vote. Two Republicans on the Rules Committee who are opposed to the FRA voted against the bill, and nearly derailed it. Leadership breathed a sigh of relief. The bill now comes to the House floor today.

The House Republican Conference, composed of all Republicans in the House, had a very productive meeting last night related to the FRA. When Speaker McCarthy entered the room, she was met with thunderous applause and a standing ovation. Though an anonymous poll was possible, it appears it was not taken. That is a strong indication McCarthy has more than a majority of Republicans supporting the bill.

Democrats are taking a different approach. Democratic Leader Hakeem Jeffries (D-NY) has told Republican leadership that they need to show two-thirds of Republicans (roughly 150 Republicans) vote in support of the FRA today. Jeffries plans to hold his members from voting until Republicans get that mark. At that point, Democrats expect roughly 100 to support the bill. Jeffries may be underselling, and it is possible the bill has even larger Democratic support.

The Problem Solvers Caucus, composed of an equal number of Republicans and Democrats, has announced it will support the FRA.

The Congressional Budget Office released its estimates on the FRA. CBO estimates that the legislation would reduce the deficit by $1.5 trillion over the next 10 years.
So, these are favorable signs for the bill’s passage. But they are not in the clear yet.

Before voting on the FRA, the House must pass a rule setting up the terms of debate. Traditionally, voting on rules is purely a party-line vote. The many Republicans opposed to FRA will likely vote no on the rule, which could prevent FRA from coming up for a vote. So, Democrats will likely have to vote in favor of the rule to ensure it isn’t blocked.

Republican leadership needs to get at least 120 Republican votes on the final passage of FRA. Anything less will make McCarthy look endangered. So, 150 is McCarthy’s goal. If he can’t get 120, it is very possible unhappy Republicans may move a motion to vacate which would depose McCarthy as speaker. Rep. Dan Bishop (R-NC) may move a motion to vacate regardless.

The Senate wants to vote on the bill by Friday, but that could slip into Saturday. FRA’s passage in the Senate is not a slam dunk. They will need 60 votes to pass. But the Senate is less contentious at this point.

It appears the legislation is coming in for a landing. Stay tuned!

URGENT Update From ARA on Behalf of Repo Alliance Re; Washington D.C.