House to vote Wednesday, Senate to follow
The announcement came late Saturday night that the White House and House Speaker McCarthy had reached a deal in principle to raise the debt ceiling. The House, which broke last Thursday for its previously scheduled Memorial Day recess, is expected to return to Washington to vote on the deal on Wednesday, May 31. The Senate will follow suit as soon as Friday, though votes may last into the weekend. The challenge now will be to assemble the actual votes necessary to pass the deal in the House and Senate with just days to go before the revised June 5th “X-date” when Treasury Secretary Yellen has stated the US Government will default on its debt.
Attached here is the White House statement on the deal.
Attached here is the House Republicans’ statement on the deal.
In announcing the deal, Speaker McCarthy said, “Normally you have 1,000-page bill, this is going to be less than 150 pages. Normally, the country doesn’t know about it until after it’s passed. Now, we’ll wait 72 hours. This is worthy of the American people. I want them to read it. I want them to understand it.” A copy of the bill text can be found here, and House Republicans’ section-by-section of the bill can be found here.
Key components of the deal include:
Suspends the debt limit through January 1, 2025. Typically, Congress has passed legislation increasing the debt limit to a specific dollar amount. This agreement simply suspends the debt limit for a period of approximately 20 months.
Imposes Spending Caps. The two-year agreement keeps non-defense funding essentially flat – about $637 billion – for Fiscal Year (FY) 2024, which begins on October 1, 2023. Defense funding would be capped at the President’s Budget Request level – $886 billion, about a 3.5 percent increase over FY2023. Veterans’ medical care would also match the President’s Budget Request of $121 billion in FY2024.
Non-defense spending would increase by one percent in 2025, followed by six years of non-enforceable funding targets. Congress would have to pass all 12 of the annual funding bills by the end of January or face a Continuing Resolution (CR) that automatically cuts spending by one percent across the board unless and until individual appropriations bills are passed. This two-year agreement is far from the $130 billion in spending cuts House Republicans originally sought.
Expands work requirements. The bill expands work requirements under the SNAP food assistance program, as well as for Temporary Assistance for Needy Families, though these expanded requirements will sunset in 2030. There are no new work requirements on Medicaid.
Changes energy permitting process. There are minimal changes to the current permitting process, adding “process efficiencies” to the decades-old law governing federal environmental reviews of projects, and calls for designating just one lead federal agency to review a particular permit. There have been pledges by negotiators, particularly House Republicans to their Senate counterparts, to continue to pursue permitting reform separate from this agreement. The deal keeps intact the hundreds of billions of dollars in clean energy funding included in last year’s Inflation Reduction Act (IRA) – funding that Republicans had sought to repeal.
Claws back unspent COVID aid. The deal includes the claw-back of unspent COVID relief funds as proposed by House Republicans.
Cuts funding for IRS. The increased funding for expanded IRS enforcement included as part of the IRA is partially cut. Republicans sought to repeal the entirety of the funding increase – $80 billion – but the deal repeals only the FY2023 portion of the funding increase.
Student loans. The deal would require borrowers to restart the payback of student loans, which was paused during the COVID-19 pandemic. The agreement would maintain Biden’s plan to provide up to $20,000 in debt relief for qualifying borrowers, though that plan remains before the Supreme Court, which is expected to rule on it in coming weeks.
