As I scrolled on my news feed this past weekend, the majority of the news articles were about the up-and-coming debt deal. So, what exactly is this debt deal we are all hearing about?
The full legislative text represents an agreement between Speaker Kevin McCarthy and President Joe Biden to suspend the nation’s borrowing limit. House lawmakers are expected to vote on it this week.
The main idea of this deal is that it extends a two-year suspension of the debt ceiling, which caps the total amount of money the government is allowed to take or borrow. The cap is now set at $31.4 trillion.
By suspending that cap, it would allow the government to continue to borrow money and pay its bills on time as long as Congress passes the agreement by June 5, the day the Treasury has said the United States will run out of cash.
As a tradeoff for suspending the limit, Republicans wanted a range of policy concessions such as limits on federal discretionary spending over the next two years, including spending on food stamps and the Temporary Aid for Needy Families program.
The deal suspends the debt limit until January 2025. This gives the Treasury time and a few extra months to keep up on payments.
This is different from the bill passed by House Republicans which raised the limit by $1.5 trillion or through March 2024.
The debt limit will be set at whatever level it has reached once the suspension ends.
Furthermore, there will also be new work requirements to receive government benefits. These requirements will affect older Americans who receive food stamps through the Supplemental Nutrition Assistance Program and who receive aid from the Temporary Assistance for Needy Families Program.
New work requirements are going to be in place for food stamps for adults ages 50-54 who no longer have children at their home. Currently, those work requirements only apply to ages 18-49. The age limit will be phased in over three years starting in fiscal year 2023.
It also impacts veterans, people experiencing homelessness, and people ages 18-24 who are moving out of the foster care system.
Office of Management and Budget Director Shalanda Young stated: “There’s a very real possibility, when we see the numbers, that the number who are phased in, who have new requirements on SNAP, is offset by the number who will now be covered under the new exemptions,” she said at the White House press briefing.
Rep. Patrick McHenry, R.-N.C., defended the new exemptions calling them “thoughtful public policy” and highlighted the bill would cut down the cap for the population states can exempt from work requirements from 12% to 8%.
Nancy Mace, R-S.C., wrote on Twitter, “The Biden-McCarthy deal expands welfare.”
Rep. Dan Bishop, R-N.C., tweeted. “Heckuva negotiation, guys.”
The bill will put an end to Biden’s pause on student loan repayments. Not moving forward with Mr. Biden’s policy to forgive between $10,000 and $20,000 in student loan debt for most borrowers. That initiative, which the Biden administration wrote out last year, is under review as of right now by the Supreme Court and could be blocked.
McConnell told reporters at the U.S. Capitol: “We anticipate the bill passing and coming over to us as soon as tomorrow. We had a healthy discussion at lunch about the pros and cons.”