Monday, June 24, 2024

U.S. debt-ceiling deal: what’s in, what’s out of the bill

(Al Jazeera Media Network) The debt-ceiling deal between President Joe Biden and House Speaker Kevin McCarthy would suspend the United States’ debt limit through 2025 to avoid a federal default while limiting government spending, but its details are unlikely to be popular with progressive Democrats or hard-right Republicans.

The Democratic president and Republican speaker are trying to win lawmakers over to the plan, announced Saturday, in time to avert a default that would shake the global economy. Congress will be scrutinizing and debating the legislation, which includes provisions to fund medical care for veterans, change work requirements for some recipients of government aid, and streamline environmental reviews for energy projects.

McCarthy said the House will vote on the legislation on Wednesday, giving the Senate time to consider it before June 5, the date when Treasury Secretary Janet Yellen said the U.S. could default on its debt obligations if lawmakers do not act in time.

Some hardline conservatives have expressed early concerns that the compromise does not cut future deficits enough, while Democrats have been worried about proposed changes to work requirements in programs such as food stamps.

With the details of the deal – released on Sunday – now clear, here’s what’s in and out:

The agreement would keep non-defence spending roughly flat in the 2024 fiscal year and increase it by one percent the following year, as well as suspend the debt limit until January 2025 – past the next presidential election.

For the next fiscal year, the bill matches Biden’s proposed defence budget of $886 billion and allots $704 billion for non-defence spending.

The bill also requires Congress to approve 12 annual spending bills or face a snapback to spending limits from the previous year, which would mean a one percent cut.

The legislation aims to limit federal budget growth to one percent for the next six years, but that provision would not be enforceable starting in 2025.

Overall, the White House estimates that the plan would reduce government spending by at least $1 trillion, but official calculations have not yet been released.

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