We now have the specifics of the agreement between President Joe Biden and House Speaker Kevin McCarthy regarding the debt ceiling after several days of speculation. The bill’s text, which is only 99 pages long, was published on Sunday and is already sparking discussion.
Through 2025, the law would suspend the debt limit. This is longer than many anticipated; there were rumors that a measure would extend the limit by a few months while the parties continued to negotiate. However, the current measure would delay the need for meaningful negotiations until after the next presidential election.
Debt Ceiling Talks
The two-year appropriations agreement — the term used by the White House — would maintain approximately stable non-defense spending for the 2024 fiscal year and increase it by 1% the following year. After 2025, there are no budget limits, only “non-enforceable appropriations targets.” House Republicans initially requested limits for ten years.
The measure recovers approximately $30 billion in unused COVID funds. The measure retains approximately $5 billion for COVID-19 vaccines and treatments. Here’s what you need to know, according to Forbes:
Student Loan Forgiveness
The measure would terminate the current moratorium on student loan repayment “sixty days after June 30, 2023,” or on August 29, 2023. Income-based repayment plans would continue to exist.
The bill did not address Biden’s proposal to cancel student loans because the Supreme Court will resolve the matter. In February 2023, oral arguments were heard in this case, and a decision is imminent.
TANF
Temporary Assistance for Needy Families (TANF) is a federal program that helps states and territories provide cash and services (such as child care) to low-income families with children. The proposed legislation modifies the existing program. Currently, states are required to demonstrate that fifty percent of TANF financial assistance recipients are employed.
However, states can reduce this proportion based on how much their caseload has decreased since 2005. The measure modifies the base year to 2015 as opposed to 2005, provides states with two years to implement these changes, and imposes additional reporting requirements.
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SNAP Benefits
SNAP, or the Supplemental Nutrition Assistance Program, was formerly known as food stamps; it provides nutrition benefits to low-income individuals and families that can be used to purchase food. The measure would extend work requirements to those between the ages of 50 and 55; the provision already applies to those between the ages of 18 and 49. The agreement would expand exemptions for veterans, destitute individuals, and foster children.
In addition, the measure makes it more difficult for states to waive SNAP employment requirements by reducing the number of exemptions they can grant and limiting their ability to carry over unused exemptions.
Veteran Care
Regarding veterans, the bill closely resembles Biden’s proposed budget for 2024, including a fund for veterans exposed to toxic substances or environmental hazards. Otherwise, the measure safeguards pandemic funding for veteran medical care and housing assistance.
The majority of energy policies under the Inflation Reduction Act, including tax credits for renewable energy, remain in effect. Nonetheless, the agreement contains modifications to the National Environmental Policy Act. Specifically, it would establish “a single lead agency” with the intent of streamlining the development and scheduling of environmental assessments.
In addition, time constraints are placed on environmental assessments and impact statements. It also includes provisions to expedite the Mountain Valley Pipeline, a significant natural gas pipeline from West Virginia to Virginia supported by Sen. Joe Manchin III (D-W.Va.). Intriguingly, these exceedingly detailed provisions comprise nearly 27 pages of the bill’s total length.
IRS Funds
“As of the date of the enactment of this Act, $1,389,525,000 of the unobligated balances of amounts appropriated or otherwise made available for activities of the Internal Revenue Service are hereby rescinded.” This represents approximately $1.4 billion of the roughly $80 billion (over a decade) in promised funding for the agency under the Inflation Reduction Act.
According to a White House press call and reports from Republican House leaders, the Biden administration consented to approximately $20 billion in cuts ($10 billion in FY24 and $10 billion beginning in FY25). This agreement is not represented explicitly in the bill’s text, but it is anticipated to be reflected in the final version.
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