WASHINGTON — President Joe Biden and House Speaker Kevin McCarthy have reached an agreement in principle on legislation to increase the nation’s borrowing authority and avoid a federal default.
Negotiators are now racing to complete the bill’s text. 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.
While many details about the deal are unknown, both sides will be able to point to some victories. But some conservatives 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.
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 percent the following year, as well as provide for a two-year debt-limit increase — past the next presidential election in 2024. That’s according to a source familiar with the deal who provided details on the condition of anonymity.
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.
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.
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.