President Biden and Speaker of the House McCarthy - Lisa Mascaro, Associated Press
Most observers were gratified that President Joe Biden and House Speaker Kevin McCarthy reached a deal to increase the debt ceiling. The debt ceiling is the maximum amount Congress sets on how much the U.S. Treasury can borrow when revenues are insufficient to pay for the things the government has already bought. If the Treasury cannot borrow the difference, then the U.S. will not be able to pay its bills. Although the act was passed in 1917 to limit President Wilson's ability to issue Liberty Bonds to pay for World War I, Republicans in the House did not use it as a political tool until Newt Gingrich recognized its potential as a weapon in 1995. Gingrich threatened to refuse to increase the debt ceiling unless Democrats agreed to budget cuts in domestic programs. President Clinton refused, and the government shut down for about 26 days. Eventually, Gingrich and the Republicans accepted Clinton's budget and increased the debt ceiling.
McCarthy obtained some budgetary reductions, but not the size and scope of what the most extreme caucus members wanted or expected. Selected provisions of the agreement involve work requirements for recipients of the Supplemental Nutrition Assistance Program; clawing back unspent COVID relief funds; limiting discretionary spending for the next two years to one percent; clawing back some of the funds that Congress had allocated for the Internal Revenue Service (IRS); and providing a special allowance for an energy-related project. The bill extends the work requirements for adults aged 50 to 54 to the requirements now existing for those aged 19 to 49. This change in work requirements offset the number who lose benefits by the addition of veterans, the homeless, and people who were children in foster care who the law had previously excluded. Also, the deal claws back from the IRS $20 billion of the $80 billion the agency received from the Inflation Reduction Act. Because Congress had intended the $80 billion to beef up IRS collection efforts, the Congressional Budget Office estimated that this provision would cost the government 2.3 billion over the next ten years unless future legislation reverses the effects of the debt ceiling agreement. Finally, the agreement suspends the debt limit for two years—during which time Congress will spare us another fight over raising the debt ceiling.
McCarthy obtained some budgetary reductions, but not the size and scope of what the most extreme caucus members wanted or expected. Selected provisions of the agreement involve work requirements for recipients of the Supplemental Nutrition Assistance Program; clawing back unspent COVID relief funds; limiting discretionary spending for the next two years to one percent; clawing back some of the funds that Congress had allocated for the Internal Revenue Service (IRS); and providing a special allowance for an energy-related project. The bill extends the work requirements for adults aged 50 to 54 to the requirements now existing for those aged 19 to 49. This change in work requirements offset the number who lose benefits by the addition of veterans, the homeless, and people who were children in foster care who the law had previously excluded. Also, the deal claws back from the IRS $20 billion of the $80 billion the agency received from the Inflation Reduction Act. Because Congress had intended the $80 billion to beef up IRS collection efforts, the Congressional Budget Office estimated that this provision would cost the government 2.3 billion over the next ten years unless future legislation reverses the effects of the debt ceiling agreement. Finally, the agreement suspends the debt limit for two years—during which time Congress will spare us another fight over raising the debt ceiling.