Biden, McCarthy Come to Initial Debt Ceiling Agreement - Here's What's in the Deal
House Speaker Kevin McCarthy and President Joe Biden have reached a deal to raise America’s debt ceiling.
The agreement, announced late Saturday, raises the debt ceiling for two years. According to The Hill, the limit was not a set dollar figure but was essentially kicked down the road for two years until after the 2024 presidential election.
The current debt limit would have been reached on June 5, and failure to reach an agreement could have triggered dire fiscal consequences, the Biden administration predicted.
The deal must still pass through Congress.
“It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone,” Biden said after the deal was reached, according to The New York Times.
“And the agreement protects my and congressional Democrats’ key priorities and legislative accomplishments. The agreement represents a compromise, which means not everyone gets what they want,” he said.
McCarthy said the agreement had “historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach.”
He also noted the work was not over.
“We still have more work to do tonight to finish all the writing of it,” he said.
Lindsay Owens, executive director of the progressive Groundwork Collaborative, condemned the deal, according to Salon.
“After inflation eats its share, flat funding will result in fewer households accessing rental assistance, fewer kids in Head Start, and fewer services for seniors. The deal represents the worst of conservative budget ideology; it cuts investments in workers and families, adds onerous and wasteful new hurdles for families in need of support, and protects the wealthiest Americans and biggest corporations from paying their fair share in taxes,” Owens said.
The Hill report, citing a Republican Party fact sheet, said discretionary non-defense spending would be rolled back to 2022 levels. For reference, this is the 2023 federal fiscal year, which ends Sept. 30. The fact sheet said overall non-defense discretionary spending could only grow 1 percent annually for the next six years.
However, The Hill report, citing a source it did not name, said that after 2025, there are no hard-and-fast limits, only spending targets. The report said the effect of the deal will be to make discretionary non-defense spending hold flat.
The report said there are adjustments to the work requirements for the Supplemental Nutrition Assistance Program, formerly known as food stamps. Although the age limit for work requirements rises to 54, some populations — such as veterans and the homeless — are exempt.
Politico noted that “the move will still enrage a wide swath of congressional Democrats, especially key progressives who pleaded with White House officials in recent days to reject any concessions for aid programs.”
Some new work requirements for the Temporary Assistance for Needy Families program have also been imposed, but the Hill report said they were not as far-reaching as the GOP initially wanted.
On the issue of revenue, McCarthy said, “There are no new taxes, no new government programs.”
Politico reported that there are cuts to the Internal Revenue Service, which will dent but not eliminate the $80 billion increase the agency received last year. The deal also seeks to claw back unspent money doled out as part of COVID-19 relief, but the details were unclear as of Sunday.
The final deal did not end the Biden administration’s student loan debt relief plan, something Republicans had sought, Politico reported.
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