Biden and McCarthy’s deal on debt limit: 3 important points.

Debt Ceiling Deal: A Win or a Loss?

A deal to raise the debt ceiling through the end of next year and cut spending in the process has upset lawmakers from both parties, even as House Speaker Kevin McCarthy (R-CA) and President Joe Biden tout the agreement as a win.

After weeks of negotiations, a deal has been reached to limit the growth of nondefense spending until the end of 2025. While House Republicans aimed to cancel the $80 billion extra funding for the IRS, the final version of the deal cuts only $10 billion of the new IRS funding in the next fiscal year and $10 billion in fiscal 2025. Democrats secured the ability to reuse the $20 billion for other nondefense programs.

Key Takeaways from the Deal

1. IRS Spending: The IRS funding has been cut by $20 billion, but Democrats argue that the money was necessary to bring in more revenue through stronger enforcement of tax laws.
2. Work Requirements: House Republicans can count new welfare work requirements as their greatest victory in the deal. The reforms would extend existing work requirements from the current cutoff age of 50 to 55, but some loopholes remain in place.
3. Spending Caps: Nondefense spending can grow at 1% in fiscal 2025, which has upset conservatives in the House who had demanded far deeper cuts to future spending.

While House Speaker Kevin McCarthy and President Joe Biden tout the agreement as a win, lawmakers from both parties are upset with the deal. The modest spending caps will expire after 2025 under the debt ceiling deal.

What do you think about the debt ceiling deal? Share your thoughts in the comments below.