US President Joe Biden and House Republican leaders reached an agreement in principle to raise the US debt ceiling and avoid a catastrophic default.
(What comes after the Agreement Principle in the US on the debt ceiling).
Here’s a look at the key points of the agreement, which must still be approved by both chambers of a divided Congress in a vote scheduled for Wednesday.
Did both sides win?
After several days of long and difficult negotiations, the deal allows both sides to claim a victory of sorts. Biden called it a “compromise” while Republican House Speaker Kevin McCarthy called it “the one the American people deserve.”
The text has not yet been disclosed and the agreement will be the subject of intense scrutiny and debate in the coming days on both sides.
Sources and reports suggest that some of the demands of both parties, such as the elimination of some tax loopholes sought by Democrats, and the repeal of clean energy tax credits sought by Republicans, were not accepted.
Sources close to the talks say the deal removes the $31.4 trillion debt cap over two years, meaning Biden would not need to renegotiate it before the 2024 presidential election.
(The principle of agreement to raise the debt ceiling in the United States).
The tentative compromise also imposes limited restrictions on federal spending that would please some Republicans, but does not offer the deep cuts that more conservatives wanted and more progressive Democrats opposed.
The agreement keeps nonmilitary spending roughly constant for fiscal 2024, starting this year, and limits growth to 1% for 2025, according to sources close to the talks.
It also lines up with the Biden administration’s plan to increase spending for the active and retired military in line with inflation.
reduction in fiscal unit
The agreement also reduces funds allocated for the expansion of the Internal Revenue Service (IRS) unit. Last year, Congress approved $80 billion for the IRS to boost tax enforcement and oversight. The debt ceiling agreement will cut 10,000 million.
Money not spent due to Kovid-19
The temporary agreement would also recover some resources that Congress appropriated for the coronavirus pandemic but were not used. A source close to the talks estimated they could run into the tens of billions of dollars.
There will be no change to Medicaid, the government health insurance program for the most disadvantaged Americans.
In principle the compromise seeks to raise work requirements for people receiving federal food assistance or family benefits, a win for the Republican side.
(Negotiations for the US debt ceiling have entered the final stages).
The age requirement for childless adults to work for food stamps is expected to increase from 49 to 54 years old. As a sop to Democrats, the deal is expected to ease requirements for retirees and the homeless.
AFP
