President Joe Biden and House Speaker Kevin McCarthy have successfully reached a promising agreement on legislation aimed at increasing the nation’s borrowing authority, ensuring the avoidance of a federal default.
With the negotiators now working diligently to finalize the bill’s text, McCarthy, R-Calif., has announced that the House will hold a vote on Wednesday, granting the Senate ample time to review and consider the legislation before June 5. Treasury Secretary Janet Yellen had emphasized the urgency of timely action, as failing to do so could result in the United States defaulting on its debt obligations.
While specific details of the deal remain unknown, both sides can find reasons to celebrate as they secure certain victories within the agreement.
However, it’s important to note that some conservatives have expressed initial concerns over the compromise, feeling that it falls short in terms of cutting future deficits. On the other hand, Democrats have been particularly worried about proposed changes to work requirements in crucial programs like food stamps.
Let’s take a closer look at what has been included and excluded in the agreement, based on the information available thus far:
TWO-YEAR DEBT INCREASE, SPENDING LIMITS
The agreement ensures that non-defense spending will remain relatively stable in the 2024 fiscal year, with a subsequent 1% increase in the following year. Additionally, it includes a two-year debt-limit increase that extends beyond the next presidential election in 2024. These details come from a trusted source who provided them anonymously.
Under the agreement, medical care for veterans will receive full funding, aligning with the levels proposed in President Biden’s 2024 budget blueprint. Notably, this funding encompasses a dedicated fund for veterans who have been exposed to toxic substances or environmental hazards. The president had originally allocated $20.3 billion for the toxic exposure fund in his budget.
While Republicans had put forward proposals to enhance work requirements for able-bodied adults without dependents in specific government assistance programs, Democrats had reservations about these changes. They argued that such alterations could result in fewer individuals being able to afford food or healthcare, without a substantial increase in job participation.
The final agreement does not include the creation of new work requirements for certain Medicaid recipients, as previously passed by House Republicans. However, the agreement does expand some work requirements within the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. The age for existing work requirements will be raised from 49 to 54, similar to the Republican proposal, but these changes will expire in 2030. Simultaneously, the White House has stated that it will reduce the number of vulnerable individuals, of all ages, subject to these requirements.
SPEEDING UP ENERGY PROJECTS
To streamline the process, the agreement introduces changes to the National Environmental Policy Act. These changes designate a single lead agency responsible for developing environmental reviews, with the aim of expediting energy projects.
WHAT WAS EXCLUDED
Although Republicans had attempted to repeal Biden’s student loan relief, which waived $10,000 to $20,000 in debt for nearly all borrowers, this provision did not gain traction with the Democrats. Consequently, the budget agreement maintains Biden’s student loan relief intact. However, it’s worth noting that the Supreme Court will ultimately have the final say on this matter. Given the current conservative majority of 6-3 on the court, justices’ skepticism during oral arguments suggests uncertainty regarding the legality of Biden’s student loan plan. A decision is expected before the end of June.
In summary, the Debt Ceiling Deal represents a significant step forward in avoiding a US default. While the finer details are yet to be revealed, the agreement touches on various aspects such as spending limits, veterans’ care, work requirements, and energy projects. It’s important to note that certain contentious issues, like student loan relief, have been left out of the final agreement, with the Supreme Court’s ruling likely to provide clarity on the matter in due course.