President Biden and the Republicans, led by House Speaker Kevin McCarthy, reached an agreement on lifting the debt ceiling, although it still must be passed by both the House and the Senate, which is generally believed to be almost certain.
The main issues in the agreement:
• Raises the debt ceiling until 2025, after the 2024 election.
• Creates spending caps for two years, but only on non-defense spending. This will keep non-defense spending levels flat next year and raising it by 1% in 2025. This means that funding for domestic programs across the board—besides Social Security and Medicare—will stay the same next year. The deal sets six years of appropriations “targets,” but unlike the first two years of caps, the targeted spending levels aren’t enforceable. The agreement also includes funding increases to improve medical care for military veterans.
• There will be time limits for Supplemental Nutrition Assistance Program such that able-bodied adults 54 years old or younger without dependent children must meet certain work requirements. Food benefits will be raised for the homeless and veterans.
• No changes to Medicaid.
• Rolls back $10 billion of $80 billion in IRS funding approved in Biden’s Inflation Reduction Act.
