Debt ceiling deal: What's in, what's out of the agreement to avert U.S. default
WASHINGTON -- Both sides can point to some victories in the debt ceiling deal reached between President Joe Biden and House Speaker Kevin McCarthy.
But some conservatives already are expressing concerns that the compromise doesn't cut future deficits enough. And Democrats have been worried about proposed changes to work requirements in programs such as food stamps.
Biden announced Sunday night that he and McCarthy had reached a final agreement on legislation that they will work to get Congress to pass. McCarthy, R-Calif., said the House will vote on the legislation on Wednesday, giving the Senate time to consider it before June 5, the date when Treasury Secretary Janet Yellen said the United States could default on its debt obligations if lawmakers did not act in time.
Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due soon, while the world, especially the markets, watching American leadership.
McCarthy and his negotiators portrayed the deal as delivering for Republicans though it fell well short of the sweeping spending cuts they sought. Top White House officials were briefing Democratic lawmakers and phoning some directly to try to shore up support.
One surprise was a provision important to influential Sen. Joe Manchin, D-W.Va., giving congressional backing for the controversial Mountain Valley Pipeline, a natural gas project, that is certain to raise questions.
Negotiators also agreed to some Republican demands for increased work requirements for food stamps recipients that Democrats had called a nonstarter.
McCarthy told reporters at the Capitol on Sunday that the agreement "doesn't get everything everybody wanted," but that was to be expected in a divided government. Privately, he told lawmakers on a conference call that Democrats "got nothing."
A look at what's in and out of the deal, based on what's known so far:
Two-year debt increase, spending limits
The agreement would keep nondefense spending roughly flat in the 2024 fiscal year and increase it by 1% the following year, as well as provide for a two-year debt-limit increase -- past the next presidential election in 2024.
The agreement would fully fund medical care for veterans at the levels included in Biden's proposed 2024 budget blueprint, including a fund dedicated to veterans who have been exposed to toxic substances or environmental hazards. Biden sought $20.3 billion for the toxic exposure fund in his budget and Republican negotiators ensured Sunday that funding was left untouched.
Republicans had proposed boosting work requirements for able-bodied adults without dependents in certain government assistance programs. They said it would bring more people into the workforce, who would then pay taxes and help shore up key entitlement programs, namely Social Security and Medicare.
The agreement would expand some work requirements for the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps. It would raise the age for existing work requirements from 49 to 54, similar to the Republican proposal, but those changes would expire in 2030. The White House said it would at the same time reduce the number of vulnerable people -- including veterans and people who are homeless -- of all ages who are subject to the requirements.
Many of those changes will sunset in 2030, allowing Congress to measure the effectiveness of these changes and make changes if need be.
Unspent COVID money
The agreement would rescind about $30 billion in unspent coronavirus relief money that Congress approved through previous bills, with exceptions made for veterans' medical care, housing assistance, the Indian Health Service, and some $5 billion for a program focused on rapidly developing the next generation of COVID-19 vaccines and treatments.
Speeding up energy projects
The deal puts in place changes in the National Environmental Policy Act for the first time in nearly four decades that would designate "a single lead agency" to develop environmental reviews, in hopes of streamlining the process.
Student loan relief
Republicans have long sought to reel back the Biden administration's efforts to provide student loan relief and aid to millions of borrowers during the coronavirus pandemic. While the GOP proposal to rescind the White House's plan to waive $10,000 to $20,000 in debt for nearly all borrowers failed to make it into the package, Biden agreed to put an end to the pause on student loan repayment.
Once Biden signs the package, the pause in student loan repayments would end within 60 days.
The fate of student loan relief, meanwhile, will be decided at the Supreme Court, which is dominated 6-3 by its conservative wing. During oral arguments in the case, several of the justices expressed deep skepticism about the legality of Biden's plan. A decision is expected before the end of June.
Money for the IRS
Domestic programs were spared from cuts in part because the Biden administration agreed to pare back some portion of the $80 billion it approved last year for an expansion of the IRS. But the exact amount of money stripped from the IRS was not immediately clear.
That $80 billion was included in the Inflation Reduction Act, Biden's signature economic bill, to help pay for the climate and health care spending in the measure. While the nonpartisan Congressional Budget Office said the expansion would increase revenue by $240 billion by allowing the IRS to step up enforcement, conservatives furious with the measure have argued it would unleash tens of thousands of new auditors on Americans. The IRS has said it plans to raise audit rates back to 2011 levels only for wealthy taxpayers.
What's left out
House Republicans passed legislation last month that would have created new work requirements for some Medicaid recipients, but that was left out of the final agreement. The idea faced stiff opposition from the White House and congressional Democrats, who said it would lead to fewer people able to afford food or health care without actually increasing the number of people in the workforce.
Also absent from the final deal is the GOP proposal to repeal many of the clean energy tax credits Democrats passed in party-line votes last year to boost the production and consumption of clean energy. McCarthy and Republicans have argued that the tax breaks "distort the market and waste taxpayer money."
The White House has defended the tax credits as resulting in hundreds of billions of dollars in private-sector investments, creating thousands of manufacturing jobs in the U.S.