President Biden and House Speaker Kevin McCarthy (R-Calif.) have reached a tentative deal to raise the debt ceiling to 2025, Axios has learned from sources in both parties.
Why it matters: The deal could put Congress on track to increase the debt ceiling — and avoid a catastrophic default by the U.S. government — before the June 5 deadline laid out by Treasury Secretary Janet Yellen on Friday.
Details: The deal between Biden and McCarthy — who spent 90 minutes on the phone Saturday evening — would raise the debt ceiling until January 2025 in exchange for spending cuts and deficit reduction measures, according to sources familiar with the negotiations.
- Spending: Non-defense discretionary spending would be kept roughly flat in 2024, with a 1% increase in 2025 and no caps on growth afterward.
- Welfare work requirements: Changes to Temporary Needy Assistance for Needy Families (TANF) and phased-in time limits for Supplemental Nutrition Assistance Program (SNAP) recipients under age 54 until 2030. Medicaid is unchanged.
- Defense: The plan includes $885 billion Biden sought in his 2024 budget proposal, up from just under $800 billion in the 2023 budget. Veterans Affairs spending also would be increased.
- Permitting reform: Streamlines the environmental review process to speed up approval for new energy projects.
- COVID aid: Claws back $29 billion in unspent COVID aid.
- IRS funding: Rescinds $1.9 billion of the $70 billion in funding for new Internal Revenue Service agents in the Inflation Reduction Act.
What’s next: McCarthy told reporters that legislative text will be released on Sunday in preparation for the House voting on Wednesday.
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