After a months-long standoff, Speaker of the House Kevin McCarthy (R-Calif.) and President Joe Biden have reached a final deal to raise the debt ceiling, which now heads for vote in Congress.
Both McCarthy and Biden have praised the deal, calling it a compromise agreement, and have expressed confidence it would pass both chambers of Congress. The deal would suspend the debt ceiling until 2025. The full text of the bill was released on Sunday evening (pdf).
The package meets several key Republican demands, including spending cuts, work requirements for government assistance, and other measures.
Though many in the GOP caucus are unhappy with the package, thinking it doesn’t go far enough, McCarthy shot back during a May 28 appearance on Fox News, saying “There’s so much in this that’s positive.”
“This is really a step in the right direction,” McCarthy said, contrasting this package with previous debt ceilings that saw no spending cuts. “It puts us on a trajectory that’s different.”
Here’s what’s inside the package.
Non-Defense Spending Caps
The deal meets a crucial GOP demand to cap spending on non-defense items.
Under the provisions of the deal, non-defense spending will remain at roughly the same level as the year prior, capping at around $637 billion. This will see an approximately one percent increase in fiscal year (FY) 2025.
However, this is far from Republicans’ original aspirations: the Limit, Save, Grow Act would have slashed spending by around $130 billion, as well as limited nondefense spending over the next decade. In contrast, this package keeps spending levels constant and does little to head off future changes to non-defense expenditures.
Meanwhile, the bill will see an increase in defense spending.
The Pentagon is set to get $886 billion in FY 2024, approximately a 3.5 percent increase that’s in line with Biden’s original budget request.
Likewise, the package meets Biden’s request for veterans’ medical care, appropriating approximately $121 billion to that end.
McCarthy praised the tentative deal for its provisions cutting federal expenditures.
“Think about this: we were finally able to cut spending,” he said. “We’re the first Congress to vote for cutting spending year over year.
“So, you cut that back, you fully fund the veterans, you fully fund defense, but you take that non-defense spending all the way back to lower than ’22 levels.”
By Joseph Lord
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