By Kevin Freking - The Associated Press
President Joe Biden and House Speaker Kevin McCarthy have reached an agreement on a law that increases the country's borrowing capacity and prevents the default of the federal debt.
Now negotiators are rushing to finalize the text of the law. McCarthy, R-Calif., said the House will vote on the bill on Wednesday, giving the Senate time to consider it by June 5, when Treasury Secretary Janet Yellen has said the U.S. could default on its debt obligations if lawmakers don't act on time.
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Although many details of the agreement are unknown, both sides will be able to score some victories. However, some conservatives have expressed concern that the deal won't make the necessary cuts to future deficits, while Democrats have expressed concern about proposed changes to work requirements for programs like food stamps.
Here's what is known about the deal so far:
Two-year debt increase, spending limits
The agreement would keep non-defense spending more or less stable in fiscal year 2024 and increase it by 1% the following year, in addition to providing for an increase in the two-year debt limit, beyond the next presidential election in 2024. This was confirmed by a source familiar with the deal who provided details on condition of anonymity.
[What can happen if the U.S. hits its debt ceiling without a political agreement?]
Care for Veterans
The agreement will fully fund health care for veterans at the levels included in Biden's proposed 2024 budget proposal, including a fund dedicated to veterans who have been exposed to toxic substances or environmental hazards. In his budget, the president asked for $20.300 billion for the toxic exposure fund.
Job Requirements
Republicans proposed increasing work requirements for able-bodied adults without dependents in some government assistance programs. They say this would add more people to the tax-paying workforce and help sustain major social programs such as Social Security and Medicare.
Democrats have sharply criticized those changes, saying they will reduce the number of people who could buy food or receive health care without actually increasing labor participation.
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House Republicans had passed legislation that would establish new work requirements for some Medicaid recipients, but that was not included in the final agreement.
However, the agreement will expand some work requirements for the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps. The agreement raises the age of current work requirements from 49 to 54, similar to the Republican proposal, but those changes will expire in 2030.
[Fitch puts US debt on 'negative watch' over lack of agreement to avoid default]
The White House said it will simultaneously reduce the number of vulnerable people of all ages who are subject to the requirements.
Accelerating energy projects
The agreement introduces changes to the National Environmental Policy Act to designate "a single lead agency" that will be responsible for designing environmental reviews, hoping to streamline the process.
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What was not included
Republicans sought to repeal Biden's initiative to write off between $10,000 and $20,000 of debt to nearly all student loan borrowers. But Democrats disagreed. The budget deal will maintain Biden's exemption, though the Supreme Court will have the final say on the matter.
The court is dominated by conservatives, and questions from judges in oral arguments showed skepticism about the legality of Biden's student loan plan. The judges are expected to make a decision before the end of June.