What’s happening: President Joe Biden and House Speaker Kevin McCarthy (R-Calif.) have reached a deal on the debt ceiling, facing mixed reviews from the GOP. Now, the task at hand is to convince skeptical members of Congress that the agreement is favorable. The deadline for the House and Senate to ratify the debt-ceiling suspension to avoid a June 5 default looms, setting the stage for a critical week ahead.
Spending: The deal effectively keeps nondefense spending at 2023 levels, with a provision for a modest 1 percent spending increase per year over the next six years. The cap isn't set in stone, as there's a renegotiation slated for 2025. The deal curbs Republicans' largest goal of slashing costs by keeping them steady and even slightly raising them for Democrats. Democrats get to keep President Biden's student loan forgiveness in the plan, and Biden got a slight increase (not enough to beat inflation) in defense funding.
Cuts: The package includes a small reduction in funding for the Internal Revenue Service and an initiative to return unspent pandemic funds. Notably, the bill leaves out any tax hikes or alternative revenue-boosting mechanisms. It also implements work prerequisites for food stamp recipients ages 50 through 54 and expedites the environmental review process for new energy ventures.
Disappointment: McCarthy’s ascent to the speakership hasn't been smooth sailing, with a cohort of Republicans electing him solely based on spending cuts negotiations. They view this goal as imperative, and as many as 60 Republicans could reject the deal. Despite speculation that McCarthy's position as speaker could be in jeopardy, he’s still confident about the deal.