Home News The US Debt Ceiling Agreement: What’s in the Bill and What’s Left

The US Debt Ceiling Agreement: What’s in the Bill and What’s Left

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A debt ceiling agreement between President Joe Biden and House Speaker Kevin McCarthy would suspend the US debt limit until 2025 to avoid a federal default while limiting government spending, but its details are unlikely to be made public. It is unpopular with progressive Democrats or far-right Republicans. .

The Democratic president and the Republican president are trying to convince lawmakers of the plan, which he announced on Saturday, in time to avert a recession that could shake the global economy. Congress will consider and debate the legislation, which also includes provisions to fund Medicare for veterans, change work requirements for some state aid recipients, and streamline environmental reviews of energy projects.

McCarthy said the House will vote on the legislation on Wednesday, giving the Senate time to consider it before June 5, when Treasury Secretary Janet Yellen said the United States could default on its debt obligations if lawmakers don’t act in time.

Some hardline conservatives expressed early concerns that the settlement would not adequately reduce future deficits, while Democrats were concerned about proposed changes to labor requirements in programs such as food stamps.

With the details of the deal — released on Sunday — now clear, here’s what’s in it and what’s not:

Suspension of the debt ceiling by two years and spending limits

The deal would keep non-military spending roughly flat in fiscal 2024 and increase it by 1% the following year, as well as suspend the debt ceiling until January 2025 — after the next presidential election.

For the next fiscal year, the bill matches Biden’s proposed $886 billion defense budget and allocates $704 billion for non-defense spending.

The bill also requires Congress to pass 12 annual spending bills or face a rapid return to the previous year’s spending limits, which would mean a 1% cut.

The legislation aims to limit federal budget growth to 1% for the next six years, but that provision will not be enforceable starting in 2025.

Overall, the White House estimates the plan will cut government spending by at least $1 trillion, but official accounts have not yet been released.

Veterans Care

The deal would fully fund Medicare for veterans at levels included in Biden’s proposed 2024 budget proposal, including a fund specifically for veterans who have been exposed to toxic substances or environmental hazards. Biden requested $20.3 billion for the Toxic Exposure Fund in his budget.

Money not spent COVID

The deal would eliminate about $30 billion in unspent coronavirus relief funds approved by Congress through previous bills. And it is recovering uncommitted money from dozens of federal programs that received assistance during the pandemic, including housing assistance, small business loans and rural broadband.

The legislation protects pandemic funding for Veterans Health Insurance, housing assistance, Indian Health Services, and nearly $5 billion for a program focused on rapid development of next-generation vaccines and treatments for COVID-19.

IRS funding

Republicans have targeted money the Internal Revenue Service (IRS) set aside last year to fight tax evasion. The bill hurts some IRS funding, eliminating $1.4 billion.

Work requirements

The deal would expand the trade requirements for the Supplemental Nutrition Assistance Program, also known as food stamps — a longstanding Republican priority. But the changes were pared down from the debt ceiling bill passed by the House.

Work requirements are already in place for most healthy adults between the ages of 18 and 49. And the bill would have higher age limits, raising the maximum age to 54 by 2025. But the allowance expires, lowering the maximum age to 49 five years later, in 2030.

Democrats also won new expanded benefits for veterans, the homeless and young seniors out of foster homes. This too will end in 2030, according to the agreement.

The agreement would also make it harder for states to waive SNAP work requirements for some people. Current law allows states to make certain exceptions to trade rules on a discretionary basis, but limits the number of people who can be exempt. The agreement will reduce the number of waivers a country can grant and limit the ability of countries to carry over the number of waivers they can grant from month to month.

The agreement would also make changes to the Temporary Assistance for Families in Need program, which provides cash assistance to low-income families with children. Although the agreement would not go as far as the House bill proposed, the agreement would introduce changes to credit that would allow states to require fewer recipients to operate, and to update and modify credit to make it more difficult for states to avoid. He. She. .

Accelerate energy projects

The agreement sets out changes to the National Environmental Policy Act for the first time in nearly four decades, and this would designate a “single lead agency” for developing and scheduling environmental reviews, hoping to streamline the process. It also simplifies some of the requirements for environmental assessments, including time limits on environmental assessments and impact statements.

Agencies will have one year to complete environmental assessments, and projects deemed to have complex environmental impacts must be reviewed within two years.

The bill also gives special treatment to the Mountain Valley pipeline — a sensation-sponsored West Virginia gas pipeline. Joe Manchin, Democrat, and Shelley Moore Capito, Republican — have approved all pending permit applications.

Student loans

Republicans have long sought to roll back efforts by the Biden administration to provide student loan relief and help millions of borrowers during the coronavirus pandemic. While the GOP’s proposal to scrap the White House’s $10,000-20,000 debt forgiveness plan for nearly all borrowers didn’t include it in the package, Biden agreed to end student loan repayment periods.

The pause in student loan payments will end in the last days of August.

Meanwhile, the fate of student loan forgiveness will be decided by the Supreme Court, which is dominated by its 6-3 conservative wing. During closing arguments in the case, several justices expressed deep doubts about the legality of Biden’s plan. A decision is expected before the end of June.

what’s left

Last month, House Republicans passed legislation that would have created new work requirements for some Medicaid recipients, but that wasn’t part of the final deal. The idea faced stiff opposition from the White House and Democrats in Congress, who said it would result in fewer people being able to afford food or health care, without increasing the number of people in the workforce.

Also missing from the deal is the Republican Party’s proposal to repeal several clean energy tax credits that Democrats passed in a partisan vote last year to boost clean energy production and consumption. McCarthy and the Republicans argued that the tax breaks “distort the market and waste taxpayers’ money.”

The White House has defended the tax breaks as having resulted in hundreds of billions of dollars in private sector investment and the creation of thousands of manufacturing jobs in the United States.

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