Key Points:
- The US government is set to raise the debt ceiling until 2025, capping federal spending for the next two years and facing opposition from both liberals and conservatives.
President Joe Biden and House Speaker Kevin McCarthy expressed confidence that their debt ceiling deal will pass Congress, calling it a bipartisan compromise.
The United States government is set to raise the debt ceiling until January 1, 2025, in a temporary measure to avoid a possible default. President Joe Biden and House Speaker Kevin McCarthy expressed confidence that their debt-ceiling deal will pass Congress, calling it a bipartisan compromise.
Bloomberg reported that the bill will suspend the debt ceiling and cap federal spending for the next two years. The deal between the two political parties is expected to face opposition from liberals and conservatives. Negotiators from both parties are expected to brief their members on the deal in separate calls. The agreement will likely be pushed through Congress before the US government runs out of borrowing capacity in about a week.
The bill creates an $886 billion cap on security spending and a $704 billion cap on non-security domestic spending for fiscal 2024. Those would rise to $895 billion and $711 billion in fiscal 2025. The bill includes dozens of other claw-backs of federal spending, including Covid-related programs, migrant and refugee assistance, and childcare and housing aid.
Representative Garret Graves, one of the Republican negotiators, said the deal would also streamline permitting for energy projects. However, a complete overhaul of the 54-year-old National Environmental Policy Act would be dealt with separately.
The debt deal specifically expedites the completion of the Mountain Valley Pipeline, a gas pipeline from West Virginia to Virginia that’s been stalled over permitting fights. While the agreement would not affect the Biden administration’s student-loan forgiveness plan, it would end the pandemic-era moratorium on repayments. The pause will be lifted within 60 days of the bill being signed. There’s little margin for error or delay, as Treasury Secretary Janet Yellen warned Friday that the debt limit must be extended by June 5 to avoid default.
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