After days of arduous negotiations, President Joe Biden and Republican House leaders have reached an agreement in principle on raising the US debt ceiling, avoiding a catastrophic default.
The agreement, which is yet to be formally announced, is set to remove the existing $31.4 trillion debt ceiling over a two-year period. This keeps President Biden from needing to negotiate another debt ceiling before the 2024 presidential elections.
The agreement will also impose more limited restrictions on federal spending than previously intended by Republican House leaders. The increase in non-military spending is expected to stay roughly stable for fiscal year 2024, and capped at a 1% increase in 2025. Congress approved $80 billion for the Internal Revenue Service to boost tax enforcement and extra oversight, however this will now be reduced to a 10,000 million cut.
The tentative agreement also seeks to recover resources that Congress allocated for the coronavirus pandemic but that were not used, estimated to amount to tens of billions of dollars. I would also introduce changes to the current work requirements of the Temporary Assistance for Needy Families program, while not introducing work requirements for Medicaid, something House Republicans called for in their debt ceiling bill.
The agreement has been reported to increase work requirements for people receiving federal food assistance or family benefits, to appease the Republican side. The age requirement for childless adults to work for food stamps is expected to increase from 49 to 54 years, however concessions are thought to be made for retirees and the homeless.
Though replete with tensions, the deal allows both sides to claim a victory of sorts. President Biden called it a “compromise”, whilst Speaker Kevin McCarthy described it as “worthy of the American people”. The agreement in principle serves as a reminder that bipartisanship is still possible, despite the recent fractious nature of American politics.