Biden and McCarthy have agreed to raise the debt ceiling and avoid default and economic uncertainty.
President Joe Biden and Speaker of the House Kevin McCarthy have reached an agreement. This will raise the debt ceiling and avoid economic uncertainty. They see the deal as a win for their respective teams. Biden emphasized protection for the country’s economic recovery and McCarthy highlighted the opportunity to negotiate the debt ceiling.
Here’s a breakdown of what the deal entails:
Two-year extension and non-military spending levels:
McCarthy agreed to extend the debt ceiling for two additional years, allowing the government to borrow beyond the current debt of $31.4 trillion. This extension ensures that Biden won’t face another debt ceiling fight before the next presidential election. Non-military spending will remain at 2023 levels until 2024, with a 1% increase in both military and non-military spending by 2025. The agreement also reallocates $30 billion from unused funds for COVID-19 emergency relief programs. $5 billion allocated to housing, COVID-19 treatment, and vaccines for uninsured Americans.
Reduced IRS Funding:
As part of the settlement, $20 billion of the previously allocated $80 billion for the Internal Revenue Service (IRS) will be gradually withdrawn. Democrats criticize this move, arguing that it mainly benefits the wealthy and contributes to a larger deficit. However, some Democrats view it as a preferable alternative to potential cuts in rights for low-income individuals or other items on Biden’s agenda.
Ending Student Loan Repayment Extensions:
The agreement stops the Biden administration from unilaterally suspending student loan repayments after August. This comes after federal borrowers were granted debt relief in March 2020 due to the economic impact of the COVID-19 pandemic. Biden’s $400 billion student loan forgiveness program remains intact, but the payment suspension will end.
SNAP work requirements:
The bill introduces temporary work requirements for adults up to age 54 under the Supplemental Nutritional Assistance Program (SNAP), expanding the current job requirement that applies to adults up to age 49. Certain exceptions will be made for homeless Americans, veterans, and adults formerly in foster care (up to age 24). These updates to the low-income food assistance program will be in effect through 2030, allowing Congress to review and make changes as necessary.
Although the debt limit agreement involves compromises on both sides, it provides short-term stability and addresses different policy areas. The response from Democrats, Republicans, and the public will shape the overall perception and impact of these measures.
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