Here's what's in, what's out of the debt limit bill to avert US default
WASHINGTON — President Joe Biden and House Speaker Kevin McCarthy have been working the phones in an intense push to sell Congress on the 99-page bill that would suspend the nation's debt limit through 2025 to avoid a federal default while limiting government spending.
The Democratic president and Republican speaker have to win their respective parties’ support for the plan in time to avert a default that would shake the global economy. On Tuesday, lawmakers will begin scrutinizing and debating the legislation, which also includes provisions to fund medical care for veterans, change work requirements for some recipients of government aid and streamline environmental reviews for controversial pipelines and other energy projects.
The modest deal gives both men wins to tout, with Biden protecting major parts of his agenda from Republican cuts and McCarthy scoring several conservative spending caps and changes to government programs.
McCarthy has pledged that the House will vote on the legislation 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.
But passage of the bill could be a heavy lift. A growing number of hardline conservatives have already expressed early concerns that the compromise does not cut future deficits enough, while Democrats have been worried about proposed changes to work requirements in programs such as food stamps.
With the details of the deal now released, here's what's in and out:
TWO-YEAR DEBT LIMIT SUSPENSION, 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 suspend the debt limit until January 2025 — past the next presidential election.
For the next fiscal year, the bill matches Biden's proposed defense budget of $886 billion and allots $704 billion for nondefense spending.
The bill also requires Congress to approve 12 annual spending bills or face a snapback to spending limits from the previous year, which would mean a 1% cut.
The legislation aims to limit federal budget growth to 1% for the next six years, but that provision would not be enforceable starting in 2025.
Overall, the White House estimates that the plan would reduce government spending by at least $1 trillion, but official calculations have not yet been released.
VETERANS CARE
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.
UNSPENT COVID MONEY
The agreement would rescind about $30 billion in unspent coronavirus relief money that Congress approved through previous bills. It claws back unobligated money from dozens of federal programs that received aid during the pandemic, including rental assistance, small business loans and broadband for rural areas.
The legislation protects pandemic funding 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.
IRS FUNDING
Republicans targeted money that the IRS was allotted last year to crack down on tax fraud. The bill bites into some IRS funding, rescinding $1.4 billion.
The White House has said that the deal also includes an agreement to take $20 billion from the IRS over the next two years and use that money for other nondefense programs.
WORK REQUIREMENTS
The agreement would expand work requirements for the Supplemental Nutrition Assistance Program, formerly known as food stamps — a longtime Republican priority. But the changes are pared down from the House-passed debt ceiling bill.
Work requirements already exist for most able-bodied adults between the ages of 18 and 49. The bill would phase in higher age limits, bringing the maximum age to 54 by 2025. But the provision expires, bringing the maximum age back down to age 49 five years later, in 2030.
Democrats also won some new expanded benefits for veterans, homeless people and young people aging out of foster care. That would also expire in 2030, according to the agreement.
The agreement would also make it slightly harder for states to waive work requirements for SNAP for certain individuals. Current law allows states to issue some exemptions to the work rules on a discretionary basis, but limits how many people can be exempted. The agreement would lower the number of exemptions that a state can issue and curb states’ ability to carry over the number of exemptions they can hand out from month to month.
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