There’s been an agreement to raise the debt ceiling

On Saturday, President Biden and House Speaker Kevin McCarthy reached an agreement on legislation that would raise the federal debt ceiling to avoid an impending default on US government debt.

The bipartisan deal, which still requires approval from both chambers of Congress, would raise the debt ceiling through January 2025 in exchange for spending cuts and other GOP-supported measures across a range of federal programs:

• Spending: Non-military spending would be kept roughly flat in 2024 and capped at a 1% increase in 2025, while military spending would remain unchanged (currently +3% for 2024).
• Welfare work requirements: US adults between the ages of 18 and 54 would be required to work to receive food stamps, up from the current top age of 49. The deal would also modify the formula used to calculate cash assistance for low-income US households.
• Covid aid: The deal would claw back roughly half of all unspent federal Covid aid money ($29 billion out of ~$60 billion).
• IRS funding: Congress would cut up to $21.4 billion of the $80 billion it previously allocated towards the IRS to boost tax enforcement and modernize its technology over the next decade.
• Energy reform: The deal would impose a two-year time limit on environmental reviews for large-scale energy and infrastructure projects, which currently take an average of 4.5 years.

👀 Looking ahead… If legislation to raise the debt ceiling isn’t passed by a hard deadline of June 15 (or a soft deadline of June 5), the US would default on its debt for the first time in history, per a new estimate from Treasury Secretary Janet Yellen.

The House is scheduled to vote tomorrow on the new agreement, which has received pushback from some progressive Democrats and conservative Republicans. If passed, the measure would then head to the Senate for approval before President Biden can sign it into law.