Debt ceiling deal: What’s in the deal and what’s in it to prevent a US default

WASHINGTON (AP) — President Joe Biden and House Speaker Kevin McCarthy have reached an agreement in principle. The act was enacted to increase the nation’s borrowing power and avoid a federal default.

Negotiators are now racing to finalize the text of the bill. McCarthy, R-Calif., said the House would vote on the legislation The Senate has until Wednesday, June 5, to consider it Treasury Secretary Janet Yellen He said the US could not repay its debt obligations If lawmakers don’t act on time.

While many details of the deal remain unknown, both sides can point to some wins. But some conservatives expressed initial concerns that the compromise would not sufficiently reduce future deficits, while Democrats worried about proposed changes to work requirements. In programs like food stamps.

Based on what’s known so far, here’s a look at what’s in and out of the deal:

Two-year loan increases, spending limits

The deal would keep non-security spending roughly flat in fiscal year 2024 and increase it by 1% the following year, as well as provide for a two-year debt limit increase past the next presidential election in 2024. This is according to one source. A person familiar with the agreement provided details on condition of anonymity.

Veterans Care

The deal would fully fund medical care for veterans at levels included in Biden’s proposed 2024 budget, including dedicated funds for veterans exposed to toxic substances or environmental hazards. Biden sought $20.3 billion in toxic exposure funding in his budget and Republican negotiators confirmed Sunday that the funding would not be triggered.

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Job requirements

Republicans have proposed increasing work requirements for able-bodied adults without dependents in some government assistance programs. They said it would bring more people into the workforce, who would pay taxes and help fund key entitlement programs like Social Security and Medicare.

The deal 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. At the same time, the White House said it would reduce the number of vulnerable people — including veterans and the general public. Homeless — People of all ages who are eligible.

Many of those changes will sunset in 2030, allowing Congress to measure the effectiveness of these changes and make adjustments if necessary.

Unspent covid money

The deal would cancel about $30 billion in unspent coronavirus relief money that Congress authorized through previous bills, except for $5 billion for a program focused on veterans’ medical care, housing assistance, the Indian Health Service and rapid development of the next generation. Covid-19 vaccines and treatments.

Expediting energy projects

The contract makes changes in place National Environmental Policy Act For the first time in nearly four decades, it will appoint a “single lead agency” to conduct environmental reviews, hoping to streamline the process.

Student loans

Republicans have long sought to roll back the Biden administration’s efforts to provide student loan relief and aid to millions of borrowers during the coronavirus pandemic. Biden agreed to end the moratorium on student loan repayments, failing to include in the package a GOP proposal to repeal the White House’s plan to write off between $10,000 and $20,000 of debt for nearly all borrowers.

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Once Biden signs the package, the moratorium on student loan repayments will end within 60 days.

Meanwhile, the fate of student loan relief will be decided by the Supreme Court, which is dominated by its conservative 6-3 division. During oral arguments in the case, several justices expressed deep skepticism about the legality of Biden’s plan. A decision is expected by the end of June.

what’s left

House Republicans passed legislation last month that would have created new work requirements for some Medicaid recipients, but it was left out of the final deal. The idea faced fierce opposition from the White House and congressional Democrats, who said it would lead to fewer people getting food or health care without actually increasing the number of workers.

The final deal does not include a GOP proposal to repeal several clean energy tax credits that Democrats passed on party-line votes last year to boost the production and consumption of clean energy. McCarthy and Republicans argued that the tax breaks would “distort the market and waste taxpayer money.”

The White House has defended the tax credits as a result of creating thousands of manufacturing jobs in America and resulting in hundreds of billions of dollars in private sector investment.

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