By MARY CLARE JALONICK and SEUNG MIN KIM Associated Press
It’s a deal no one in Washington claims to really like. But after weeks of negotiations, President Joe Biden and House Speaker Kevin McCarthy have struck an agreement to raise the debt ceiling and avert a potentially devastating government default.
The stakes are high for both men — and now each will have to persuade lawmakers in their parties to vote for it. Treasury Secretary Janet Yellen said last week that the United States could run out of cash to pay the bills and default on its obligations if the debt ceiling is not raised by June 5.
The ultimate agreement, hammered out by Biden, McCarthy and a small group of their deputies, is a two-year budget deal that would essentially hold spending flat for 2024, while boosting it for defense and veterans, and capping increases at 1% for 2025. It would suspend the debt limit until January 2025, after the next presidential election. Republicans had insisted on reducing spending and had passed their own bill with much larger cuts last month.
The package would also make policy tweaks, including by adding work requirements for some food aid recipients and streamlining an environmental law that Republicans say has made it harder to build energy projects.
Takeaways from the deal, and from the negotiations that led up to it:
McCARTHY’S DELICATE BALANCING ACT
Ever since McCarthy won the House speakership on the 15th ballot in January, it was clear that the debt ceiling negotiations would be his first and perhaps biggest test.
Known more for strategy than policy, McCarthy has had a challenge that seemed almost insurmountable, with a narrow majority and a sizable group of hard-right conservatives certain to oppose anything he negotiated with Biden. And he could still find himself in the middle of a crisis if too many in his caucus revolt when the House votes on the package this week.
Through it all, the Californian has exhibited his typical laid-back vibe, projecting confidence about the bill and its success. He said Sunday that he will win a majority of Republicans on the bill and some Democrats.
BIDEN’S RELUCTANT COMPROMISE
For months, Biden and his aides had a mantra: There would be no negotiation on the debt limit. But then he negotiated anyway.
It’s not where Biden, a veteran of the nasty 2011 debt-limit battle that saw the nation’s credit rating downgraded for the first time in history, wanted to be. But it was a likely scenario — with a Republican-controlled House that had made it clear from the start that it would not raise the borrowing authority under a Democratic president without extracting spending curbs or other policy concessions.
There was no way Biden, who is running for re-election next year, would want a historic default on his watch.
Biden has continued to insist that he was negotiating on the budget, not the debt ceiling. But pushed by a reporter Sunday evening who noted that was precisely what Republicans were seeking in exchange for lifting the debt limit, the president seemed to break from his talking point.
“Sure, yeah,” Biden said, chuckling slightly. “Can you think of an alternative?”
Now he will have to sell it to House Democrats, who must vote for it in big enough numbers to make up for defecting Republicans.
LONG-SOUGHT GOP POLICY
Republicans were able to win some policy changes they have sought for years, however modest, including on food aid. The bill would raise the age limit for existing work requirements in the Supplemental Nutrition Assistance Program, also known as food stamps. It would also create a new agency to develop and streamline environmental reviews that Republicans have complained about for decades.
The new work requirements for able-bodied SNAP recipients without dependents would phase in by 2025 and expire by 2030. And a provision pushed by Biden would take some vulnerable recipients — like veterans and the homeless — off work requirements entirely. But Republicans made clear that pushing more people to work in exchange for government benefits was a major victory for them, even if mostly symbolic.
The bill also would amend the National Environmental Policy Act and designate “a single lead agency” to develop environmental reviews, in hopes of streamlining the process.