The debt ceiling deal reached by House Speaker Kevin McCarthy, R-California, and President Joe Biden would suspend the federal debt ceiling until January 1, 2025, instead of linking it to a specific amount of debt in exchange for certain spending cuts and freezes, as well as changes to federal permitting regulations.
The agreement, which is scheduled for a House vote Wednesday before going to the Senate, would cap discretionary defense spending at about $886.5 billion and non-defense discretionary spending at about $703.5 billion for fiscal 2024, which begins on October 1, and limit fiscal 2025 spending to a 1% increase. It would also rescind about $20 billion of the $80 billion granted to the IRS by the Inflation Reduction Act over 10 years and expand work requirements for federal food stamps and the federal welfare program known as Temporary Aid to Needy Families. It does not alter work requirements for Medicaid or alter various incentives related to green energy in the IRA.
The Biden administration would also be forbidden from further extending the COVID-19-era student debt repayment pause past the end of August, though the agreement is agnostic on the debt relief program itself, effectively leaving it to the Supreme Court, which is deliberating on a case now, to settle.
The bill clears the remaining permitting requirements for the Mountain Valley Pipeline, a politically sensitive natural gas pipeline that would run through parts of West Virginia and Virginia and has been championed aggressively by Senator Joe Manchin, D-West Virginia.
The House Rules Committee hosted a hearing Tuesday in which the chairs and ranking members of the House Ways and Means and House Budget committees were called to testify. The purpose of the hearing was to debate the rules concerning the floor debate and vote on the bill, such as the length of time permitted for debate and what amendments can be offered.
The leadership of the three committees, as well as the membership of the House Oversight Committee, spent a lot of time assigning blame, highlighting their issues with the proposal and lingering on “why we are here today”—but all signaled an intent to support the bill as written.
Representative Tom Cole, R-Oklahoma, chairman of the Rules Committee, quipped that “this bill could have been a lot more awful than it is.” Representative Mike Thompson, D-California, the ranking member of the Ways and Means Committee, commented that the proposal “averts what would be a catastrophic default” and “if we allow the economy to crash, nobody will be lifted out of poverty.”
Similar remarks reflecting mixed feelings, but an overall sentiment of support was expressed by Representatives Ron Estes, R-Kansas, and Brendan Boyle, D-Pennsylvania, the leaders of the Budget Committee, who were also present at the hearing.
Representative Ralph Norman, R-South Carolina, a more conservative member of the House Oversight Committee, who previously said he would vote against the bill if it is not amended, said during the hearing that he would ultimately vote for the bill “because it puts us in the right direction.”
McCarthy said Sunday that the full House will vote on the bill on Wednesday. This will allow the Senate time to consider it before June 5, the date by which the Department of the Treasury has said the U.S. will run out of money to pay its obligations.
The House Oversight Committee was still debating the measure at the time this article was published.
Tags: debt ceiling, IRS