House Speaker Kevin McCarthy is facing criticism from members of his own political party on a debt ceiling deal he struck over the weekend with President Biden that hard line conservatives say doesn’t go far enough to curb federal spending.
The 99-page bill released Sunday would raise the debt ceiling by $4 trillion to a total of $35 trillion and suspend the nation’s debt limit through 2025 to avoid a federal default.
Republicans, who only wanted to raise the limit by $1.5 trillion, are calling the deal a ‘blank check’ to Democrats because it does not fully rescind all $80 billion in IRS funding or the 87,000 new agents, fails to cap federal spending for 10 years and does not reclaim all $50 billion in unspent COVID funds.
Even Florida Gov. Ron DeSantis says the new deal keeps the nation on a path toward ‘bankruptcy.’
Progressives are opposed to some of the proposed changes to work requirements in social programs including food stamps.
Now both the Democratic president and Republican speaker are trying to win over skeptical lawmakers in order to stave off default by June 5, the ‘x-date’ when Treasury Secretary Janet Yellen said the U.S. could default on its debt obligations.
Speaker Kevin McCarthy unveiled the 99-page bill raising the debt ceiling to avoid the U.S. defaulting
‘Conservatives have been sold out once again!’ lamented Kentucky Sen. Rand Paul and Republican Rep. Chip Roy from Texas called the agreement a ‘turd-sandwich.’
DailyMail.com breaks down what made it in and what got cut from the debt ceiling deal and how lawmakers are reacting now that the full text is available.
DEBT LIMIT SUSPENSION FOR TWO YEARS
The cornerstone of the deal includes a two-year suspension of the debt limit until January 2025 after the next presidential election.
Republicans are taking issue with the $4 trillion ceiling increase, saying there could be virtually unlimited spending for the last two years of Biden’s first term.
The GOP had backed a deal in which the debt ceiling was only raised by $1.5 trillion – which was not agreed to.
The agreement also limits spending by keeping all non-defense appropriations roughly flat in Fiscal Year 2024 and increasing it by only one percent the following year – a point that conservatives are taking issue with since they urged a freeze on all federal spending for 10 years.
Congress is also required under the new bill to approve 12 annual spending bills or face a snapback to spending limits from the previous year.
The White House predicts the plan would reduce government spending by $1 trillion, but Republicans are calling them ‘fake’ spending cuts.
‘Fake conservatives agree to fake spending cuts,’ Sen. Paul tweeted. ‘Deal will increase mandatory spending ~5%, increase military spending ~3%, and maintain current non-military discretionary spending at post-COVID levels.’
‘No real cuts to see here.’
Rep. Norman of South Carolina called the deal ‘insanity’ said he won’t ‘vote to bankrupt our country.’
McCarthy and Biden spoke several times to reach a final hour deal after a months-long stalemate – the package must be signed before June 5 to avoid default. Pictured: McCarthy and Biden shake hands at the president’s State of the Union address in Congress on February 7, 2023
INCREASED REQUIREMENTS FOR GOVERNMENT AID RECIPIENTS
The largest sticking point on the bill on the Democratic side is opposition to enhancing the work requirements for Americans to receive government aid – like food stamps.
McCarthy and Biden’s debt ceiling deal delivers on a long time Republican priority of expanding work requirements for the Supplemental Nutrition Assistance Program (SNAP) – even though the changes are a pared-down version of what conservatives really want.
While there are already work requirements for most able-bodied adults between 18 and 49, the bill raises the age limit to 54, but has an expiration date and would lower the age right back down to 49 in 2030.
The agreement would also make it more difficult for states to waive work requirements for SNAP by lowering the number of exemptions permitted at the state-level each month.
Democrats also won some new expanded benefits for veterans, homeless people and young people aging out of foster care. That would also expire in 2030, according to the agreement.
The agreement would also make changes to the Temporary Assistance to Needy Families program, which gives cash aid to families with children.
While not going as far as the House bill had proposed, the deal would make adjustments to a credit that allows states to require fewer recipients to work, updating and readjusting the credit to make it harder for states to avoid.
Progressives, like Rep. Pramilia Jayapal, are already complaining about Biden even opening the door for increasing the burden on struggling Americans.
The Washington congresswoman warned in a Sunday interview that Democratic leadership ‘should worry’ about whether progressive lawmakers will support the bill due to this provision.
STUDENT LOAN REPAYMENTS RESUME
Another thing Democrats could oppose the entire deal over is the resumption of student loan payments in August.
Since March 2020, Americans with federal student loans have had their payments on pause due to the COVID-19 pandemic, with accruing interest brought to zero percent.
In addition to pushing off student loan repayment, President Biden has also tried to impose a forgiveness plan to waive between $10,000 and $20,000 for those with outstanding federal student loans.
This failed to make it into the debt ceiling package, and instead, Biden agreed to end the more than three-years-long pause on loan repayment and have repayment resume at the end of August.
The proposal for widespread forgiveness is currently stuck in the Supreme Court – and the fate of the president’s plan will be known next month with a decision by the panel.
Progressives have lamented that forgiving just part of student loans doesn’t go far enough, and have called on Biden to wipe clean all federal debt for higher education.
Conservatives are not pleased with the deal. Republican Sen. Ted Cruz claimed McCarthy essentially wrote ‘a blank check’ to Democrats
Sen. Rand Paul tweeted that ‘conservatives have been sold out once again’
South Carolina Rep. Ralph Norman called the deal ‘insanity’ and said he won’t vote to pass the package
CUTS TO IRS FUNDING BUT 87,000 NEW AGENTS WILL STAY
Republicans are not happy with the spending bill passed last year to massively increase the money for the Internal Revenue Service (IRS) – and mainly the part allocated for the hiring of tens of thousands of more agents to audit Americans’ taxes and crack down on tax fraud.
In the debt ceiling deal, McCarthy targeted money that the IRS was allotted by cutting $21 billion of the $80 billion.
Many members of McCarthy’s party, however, say that the bill doesn’t go far enough and had urged all funding to the IRS be rescinded, especially the provision to hire more agents.
Sen. Cruz complained that the package will still allow for the hiring of 87,000 more agents.
‘There’s not ‘one thing’ for Dems,’ Sen. Ted Cruz tweeted, claiming Speaker McCarthy was ‘right’ to say so. ‘There are $4 trillion things—a blank check—for Democrats.’
‘Plus 87,000 things: new IRS agents to harass Americans,’ he added. ‘All in exchange for eliminating virtually ALL of the House’s spending cuts.’
RECLAIMING UNSPEND COVID FUNDS
Money allocated but not used for COVID-related relief will be rescinded through the agreement.
The agreement settled on clawing back $30 billion in unspent coronavirus relief funds approved by Congress for programs like rental assistance, business loans and expanding broadband to rural areas that was never obligated.
While this is a win for Republicans, they ideally wanted to take back much more – $50 billion – in remaining funds.
So the $30 billion figure does not go far enough according to disgruntled Republicans.
McCarthy’s deal with Biden allows Congress to reclaim those funds but also protects pandemic money for veterans’ medical care, housing assistance and some $5 billion for a program focused on developing the next generation of COVID-19 vaccines and treatments.