Biden and McCarthy agree on debt ceiling deal. Here’s what’s included.

Biden and McCarthy Reach Deal to Raise America’s Debt Ceiling

House Speaker Kevin McCarthy and President Joe Biden have reached a deal to raise America’s debt ceiling for two years, according to The Hill. The agreement was announced late Saturday and essentially kicks the limit down the road until after the 2024 presidential election.

The current debt limit would have been reached on June 5, and failure to reach an agreement could have triggered dire fiscal consequences, the Biden administration predicted.

The Details of the Deal

The deal, which must still pass through Congress, includes historic reductions in spending and consequential reforms that will lift people out of poverty into the workforce, according to McCarthy. However, Lindsay Owens, executive director of the progressive Groundwork Collaborative, condemned the deal, saying it cuts investments in workers and families and protects the wealthiest Americans and biggest corporations from paying their fair share in taxes.

The Hill report, citing a Republican Party fact sheet, said discretionary non-defense spending would be rolled back to 2022 levels. For reference, this is the 2023 federal fiscal year, which ends Sept. 30. The fact sheet said overall non-defense discretionary spending could only grow 1 percent annually for the next six years.

Adjustments to the work requirements for the Supplemental Nutrition Assistance Program have been made, and some new work requirements for the Temporary Assistance for Needy Families program have also been imposed, but the Hill report said they were not as far-reaching as the GOP initially wanted.

On the issue of revenue, McCarthy said, “There are no new taxes, no new government programs.” Politico reported that there are cuts to the Internal Revenue Service, which will dent but not eliminate the $80 billion increase the agency received last year. The deal also seeks to claw back unspent money doled out as part of COVID-19 relief, but the details were unclear as of Sunday.

Reaction to the Deal

Biden said the agreement is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone. He also noted that the agreement represents a compromise, which means not everyone gets what they want.

McCarthy said the agreement had “historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach.” However, he also noted that there is still more work to do to finish all the writing of it.

Politico noted that “the move will still enrage a wide swath of congressional Democrats, especially key progressives who pleaded with White House officials in recent days to reject any concessions for aid programs.”

The final deal did not end the Biden administration’s student loan debt relief plan, something Republicans had sought, Politico reported.

“After inflation eats its share, flat funding will result in fewer households accessing rental assistance, fewer kids in Head Start, and fewer services for seniors. The deal represents the worst of conservative budget ideology; it cuts investments in workers and families, adds onerous and wasteful new hurdles for families in need of support, and protects the wealthiest Americans and biggest corporations from paying their fair share in taxes,” Owens said.

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