AP News - This weekend, President Joe Biden and House Speaker Kevin McCarthy have reached an agreement on the nation's debt ceiling and curb spending. This afternoon, the deal cleared a key procedural vote in the US House of Representatives by a bipartisan vote of 241-187 and is expected to receive final approval from the House tonight to send the package to the Senate. The deal holds nondefense spending flat in 2024, allows 1% growth in nondefense spending in 2025, and suspends the debt limit until 2025. It also rescinds $30 billion in unspent COVID-19 relief funding. The agreement rescinds $1.4 billion from the IRS immediately and moves $20 billion over the next two years from the IRS to defense spending. It also increases the age limit from 49 to 54 until 2025 on work requirements for the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) recipients. The agreement simplifies environmental reviews for energy projects with the goal of speeding up the process.
The Treasury Department estimates that without the deal, the debt ceiling would be reached on Monday, June 5, at which point the federal government would default on its debt for the first time in American history. A default would result in higher interest rates (thereby raising rates on new mortgages, car loans, and other types of loans), delays on government payments (including tax refunds, Social Security payments, vendor payments, and government employee salaries), program cuts (including veterans services).
