Apparently, there has been a deal struck between Joe Biden and House Speaker, Kevin McCarthy on the debt ceiling. And as I’ve said many times, it is something neither side is going to like, but knows they must accept to avoid the US defaulting on it’s debt on June 5th (the new date Janet Yellin said was the drop dead date).
Now the question becomes, will there be enough votes to get the bill through Congress? It contains a Biden demand that the debt ceiling last for two years, not less than one that the House bill Republicans passed. It does not set a specific spending limit to the debt ceiling, more of a timeline. It freezes, or has small cuts in spending for 2024’s budget that starts October 1st, rolling back to the 2022 budget and will only increase by 1% for the following six years according to a one-page GOP memo.
For the GOP, they got a couple of things they wanted too that Democrats will hate. The agreement increases the age in which food stamp recipients must work. Currently you must seek employment if you’re on SNAP and 49 years of age or under. That has been increased to 54 years of age. However, homeless and Veterans are exempt from the age increase. The deal does not effect spending on Medicaid, which the White House said the “MAGA Republicans” wanted to do away with (not true). And it keeps in place Biden’s student loan program (for now…until the Supreme Court releases it’s decision on the matter next month).
In the long run, is the bill good for the country? I’m wondering. I know we don’t want to default on the debt, that would be a huge catastrophe. But it seemed to me like the GOP gave much more than it got in these negotiations. Initially, the spending cuts were to total three times the amount of the debt ceiling increase. That will stay in place with little reduction next year, and will limit increases in the budget to 1% a year for a total of six years. However, according to someone that has seen the actual proposed bill, there are no “non-enforceable appropriations targets” after 2025, so even though they say the 1% increases are going to last six years, that doesn’t mean it’s written in stone.
One thing that the GOP wanted and got was a cutting of the full $80 billion in IRS additional spending over 10 years. That means that the IRS probably won’t be hiring those 57,000 additional agents to come and audit you. And the White House caved on a major energy permitting reform, making it easier for oil companies to drill for oil in this country.
McCarthy said last night that there were no new government programs added to this bill, and there were no new taxes included in it either, both of which should make the GOP folks rather happy.
Now the question becomes, will this pass muster in the House and Senate? It most assuredly will have to be a bi-partisan piece of legislation because the Freedom Caucus is already saying that it’s dead on arrival. Democrats aren’t at all happy with the fact that the spending is frozen at current levels with a slight reduction in certain non-defense programs next year, and they only get a 1% increase in 2025 (inflation will be more than that!).
I think passing the Senate will be a lot easier than passing the House, but I’m sure there will be enough Democrats that will join the non-Freedom Caucus folks and vote for it. There will be some Democrat dissention. I can imagine the Whack Job group that AOC heads up is going to most likely vote no on the deal. But this should pass the House as well, with some lubricant to various lawmakers.
McCarthy will post this today so that the members can take a look at it, and a vote will be scheduled for Wednesday. Once again, the government runs right up to the last possible moment before making something happen. I’m just surprised they didn’t kick the can down the road again…of course, you can say that they did when you look at what each side got. Spending won’t decrease, and the debt ceiling did increase.
Carry on world…you’re dismissed!
You must be logged in to post a comment.