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After several weeks of tense negotiations, President Joe Biden and House Republicans have reached an agreement in principle to address the debt limit and cap spending.
The drama is by no means over. Congressional leaders in both parties have to convince enough of their members to vote for the agreement, which contains provisions that lawmakers on each side of the aisle don’t support.
The bill text was released on Sunday evening, and both parties are trying to cast the provisions as favorable for their side.
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Here’s what we know about the deal, based on the bill text, White House sources and a fact sheet circulated by House Republicans.
Addresses the debt ceiling: The agreement would suspend the debt limit through January 1, 2025. This removes it as a potential issue in the 2024 presidential election.
Caps non-defense spending: Under the deal, non-defense spending would remain relatively flat in fiscal 2024 and increase by 1% in fiscal 2025, after certain adjustments to appropriations were made, according to a White House official.
The adjustments include shifting $20 billion in Internal Revenue Service funding to other non-defense areas and rescinding $30 billion in unobligated Covid-19 relief funding, according to the official.
After fiscal 2025, there would be no budget caps, according to the official.
The House GOP fact sheet says that non-defense discretionary spending would be rolled back to fiscal 2022 levels and topline federal spending would be limited to 1% annual growth for the next six years.
The agreement calls for spending $886 billion on defense, $121 billion on veterans’ medical care and $637 billion on other non-defense programs, after taking the adjustments into account, according to talking points the White House distributed to Democratic members, which were obtained by CNN.
The debt ceiling bill that House Republicans passed last month would return discretionary spending to fiscal 2022 levels and then limit the growth in spending to 1% for a decade. Defense spending would be protected.
Protects veterans’ medical care: The deal would maintain full funding for veterans’ health care and would increase support for the PACT Act’s toxic exposure fund by nearly $15 billion for fiscal year 2024, according to a White House source.
The House GOP fact sheet says veterans’ medical care would be fully funded.
Expands work requirements: The agreement calls for temporarily broadening of work requirements for certain adults receiving food stamps.
Currently, childless, able-bodied adults ages 18 to 49 are only able to get food stamps for three months out of every three years unless they are employed at least 20 hours a week or meet other criteria. The agreement would increase the upper limit of the mandate to age 55 in phases, according to the bill text.
However, the deal would also expand exemptions for veterans, people who are homeless and former foster youth in the Supplemental Nutrition Assistance Program, or SNAP, as food stamps are formally known.
And all the changes would end in 2030.
The administration believes that about the same number of food stamp recipients would be subject to work requirements because of the exemptions, though it is waiting for a formal estimate, the White House official said.
The agreement would also tighten the current work requirements in the Temporary Assistance for Needy Families program, primarily by adjusting the work participation rate credits that states can receive for reducing their caseloads.
Work requirements would not be introduced in Medicaid, which House Republicans had called for in their debt ceiling bill.
Claw back some Covid-19 relief funds: The deal would rescind $30 billion in unobligated funds from the Covid-19 relief packages that Congress passed to respond to the pandemic, according to the House GOP fact sheet.
It would retain $5 billion in funding to accelerate the development of Covid-19 vaccines and treatments, and funding for vaccines and treatments for the uninsured, according to a White House source. It would also keep money for housing assistance, the Indian Health Service and other measures.
Cut Internal Revenue Service funding: The agreement would cancel the total fiscal year 2023 staffing funding request that the House GOP says would go for new IRS agents, according to the fact sheet.
House Republicans have been determined to jettison the roughly $80 billion in IRS funding contained in the Inflation Reduction Act that Democrats passed last year. The GOP lawmakers argue that the money will be used to hire an army of new agents to audit Americans, but the agency says it will also be used to support operations, modernize customer service technology and assist taxpayers.
The deal would repurpose $10 billion from fiscal 2024 and another $10 billion from fiscal 2025 appropriations to be used in non-defense areas, according to the White House source.
Restart student loan repayments: Under the deal, borrowers would have to begin paying back their student loans at the end of the summer, as the Biden administration has already announced, according to another source familiar with the debt ceiling talks. The pause has been in effect since the Covid-19 pandemic began.
Also, the agreement would maintain Biden’s plan to provide up to $20,000 in debt relief for qualifying borrowers, the source said. The measure is currently before the Supreme Court, which is expected to rule on it in coming weeks.
The deal would also continue Biden’s income-driven repayment plan, according to the White House source.
The House GOP last week passed a resolution seeking to block the forgiveness program, as well as end the pandemic-related pause on federal student loan payments.
Maintain climate and clean energy measures: The agreement would not make any changes to the Inflation Reduction Act’s climate and clean energy provisions, according to the White House talking points.
House Republicans had sought to repeal the law’s clean energy tax credits and subsidies.
The agreement also includes measures in the National Environmental Policy Act aimed at boosting the coordination, predictability and certainty associated with federal agency decision making, according to the White House source.
It would designate a single lead agency, charged with developing a single environmental review document, and also would require agencies to complete environmental reviews in one year, or two years for the most environmentally complex projects.
This story has been updated on Sunday with release of the bill text and other information.
