The U.S. Debt Ceiling Deal: What's in this Bill? What's not included?
By: May. 30,2023
The debt ceiling deal between President Joe Biden and House Speaker Kevin McCarthy, which would suspend the U.S. debt ceiling until 2025 to avoid a federal default, along with limits on government spending, is unlikely to be popular with progressive Democrats or far-right Republicans for its details.
The president, a Democrat, and the speaker, a Republican, are trying to win lawmakers' support for the plan announced last Saturday in time to avoid a debt default that could shake the global economy. Congress will review and debate the legislation, which also includes funding for veterans' health care, changes to work requirements for some government aid recipients and streamlined environmental reviews of energy projects.
McCarthy said the House will vote on the bill this Wednesday to allow the Senate to study it by June 5. U.S. Treasury Secretary Janet Yellen has said the United States could default on its debt by June 5 if lawmakers don't act in time.
Some hard-line conservatives have long expressed concern that the compromise would not be enough to cut future deficits, while Democrats have been concerned about proposed changes to work requirements in programs such as food stamps.
With the details of the deal being released last Sunday, it is now clear that the following is in place:
A two-year suspension of the debt ceiling and limits on spending
The deal would leave non-defense spending roughly flat in fiscal year 2024 and increase it by 1 percent the following year, and suspend the debt ceiling until January 2025, after the next presidential election.
As for the next fiscal year, the bill matches Biden's proposed $886 billion defense budget and appropriates $704 billion for nondefense spending.
The bill also requires Congress to approve 12 annual spending bills or be subject to prior-year spending limits, which would mean a 1 percent cut.
The legislation aims to limit federal budget growth to 1 percent over the next six years, but the provision would no longer be enforced starting in 2025.
Overall, the White House estimates the plan would reduce government spending by at least $1 trillion, but official calculations have not been released.
The deal would fully fund veterans' health care as outlined in Biden's proposed 2024 budget blueprint, which includes a fund specifically for veterans exposed to toxic substances or environmental hazards. Biden seeks $20.3 billion in his budget for this toxic exposure fund.
Unspent Funds in New Crown Epidemic
The agreement would eliminate nearly $30 billion in unspent New Crown outbreak relief funds approved by Congress in an earlier bill. It would recoup unspent funds from dozens of federal programs that received assistance during the outbreak, including rental assistance, small business loans and broadband services in rural areas.
The legislation still protects epidemic funding for veterans' health care, housing assistance, Native health services, and nearly $5 billion in funding for the rapid development of the next generation of New Crown vaccines and treatment programs.
Federal IRS Funding
Republicans also took aim at funds allocated by the Internal Revenue Service (IRS) in the last year to combat tax fraud. The bill takes away some of the money allocated to the IRS and revokes $1.4 billion of it.
Biden says final version of U.S. debt ceiling deal is ready to be offered to Congress for a vote (Al Jazeera)
The deal would expand work requirements for the Supplemental Nutrition Assistance Program, also known as "food stamps," which has long been a Republican priority. But the changes have been scaled back from the debt ceiling bill passed by the House.
The original bill already imposed work requirements on most able-bodied adults between the ages of 18 and 49. And the newly passed bill would gradually raise the age limit therein, and raise the maximum age to 54 by 2025. But when the provision expires in five years (2030), the maximum age limit would still fall back to 49.
Democrats also won some new expanded benefits for veterans, the homeless and other groups. Under the terms of the deal, these benefit elements will also expire in 2030.
The agreement will also make it more difficult for states to waive work requirements for certain individuals under the Supplemental Nutrition Assistance Program. Current law allows states to make some discretionary work rule waivers, but limits the number of waivers. The current agreement will reduce the number of waivers states can provide and limit the ability of states to carry over the number of waivers they provide each month to the next month.
The agreement would also change the Temporary Assistance for Needy Families program - which provides cash assistance to low-income families with children. While not as long term as the action the House bill appears to propose, the agreement would adjust a credit to avoid states from not imposing work requirements on aid recipients, and also updates and adjusts the credit to make it more difficult for states to avoid its requirements.
Accelerated Energy Projects
The agreement makes the first changes to the National Environmental Policy Act in nearly 40 years and designates a "single lead agency" to develop and schedule environmental reviews in an effort to streamline the process. It also streamlines some requirements for environmental reviews, including limits on the length of environmental assessments and impact reports.
Agencies will have one year to complete environmental reviews, and projects deemed to have complex environmental impacts will need to be re-reviewed within two years.
The bill also gives special treatment to the Mountain Valley Pipeline (MVP) by approving all outstanding permit applications. It is important to note that this is a West Virginia natural gas pipeline supported by Democratic Senator Joe Manchin and Republican Senator Shelley Moore Capito.
Republicans have long tried to block the Biden administration's efforts to provide student loan forgiveness and assistance to millions of borrowers during the new crown epidemic. While a Republican proposal to eliminate the White House plan to forgive $10,000 to $20,000 in debt for nearly all borrowers was not included in the package, Biden agreed to end the moratorium on student loan repayments.
It should be noted that the student loan repayment moratorium program will end at the end of August this year.
In the meantime, the fate of student loan forgiveness will be decided by the Supreme Court, which is dominated by its conservative wing by a 6-3 vote. During oral arguments in the case, several justices expressed deep doubts about the legality of Biden's plan. The court is expected to make a final decision by the end of June this year.
What was left out?
Republicans in the House passed legislation last month that would have created new work requirements for some Medicaid recipients, but the issue was not mentioned in the final agreement. The idea was strongly opposed by the White House and Democrats in Congress - who argued that it would result in fewer people being able to afford food or health care without actually increasing the number of people in the workforce.
Also missing from the final deal was another Republican proposal to repeal many of the clean energy tax credits that Democrats passed on a partisan vote last year on the grounds of promoting clean energy production and consumption. McCarthy and Republicans argue that such tax credits "distort the market and waste taxpayer dollars.
The White House has defended such tax credits as generating hundreds of billions of dollars in private sector investment and creating thousands of manufacturing jobs in the United States.
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