House rules meets Tuesday; House vote Wednesday; Senate to follow
President Joe Biden and House Speaker Kevin McCarthy (R-Calif.) reached a bipartisan framework deal to raise the debt ceiling and implement many spending cuts demanded by Republicans. However, the deal avoids broader budget reductions sought by the GOP and maintains key domestic programs championed by Biden.
The deal’s fate in Congress is uncertain due to criticisms from progressive Democrats and hardline Republicans. The two sides have to carefully thread the needle in finding a compromise that can clear the House, with a 222-213 Republican majority, and Senate, with a 51-49 Democratic majority.
Link to a House Republican summary of the package. Link to a White House fact sheet. Link to 99-page text of bill.
“Maybe it doesn’t do everything for everyone, but this is a step in the right direction that no one thought that we would be able to today,” McCarthy told Fox News Sunday about the months of on-and-off negotiations with Biden. “I’ll debate this bill with anybody,” he added. “Is it everything I wanted? No, because we don’t control all of it. But it is the biggest rescission in history. It is the biggest cut Congress has ever voted for in that process.”
Despite the opposition from some vocal GOP members of Congress, McCarthy said Sunday he was not concerned “because more than 95% of all those in the conference were very excited.” Like McCarthy, Biden said the deal represents a series of compromises that will likely have overwhelming support from Congress. “The agreement represents a compromise, which means not everyone gets what they want,” Biden said in a statement. “That’s the responsibility of governing.”
The House Rules Committee will meet at 3 p.m. ET Tuesday to set the parameters of debate, and the chamber is expected to vote Wednesday night after the stock market’s close. Three conservative Republicans on the panel ‚Reps. Tom Massie (Ky.), Ralph Norman (S.C.) and Chip Roy (Texas) — have railed against the bill publicly. If all three vote no, GOP leadership will need Democrats to get the bill through Rules. If no Democrats support the rule, which wasn’t a certainty, and Roy and Norman end up voting “no” in committee then it could fall to Massie to save the package. Massie won inclusion of his proposal to impose an across-the-board cut on stopgap funding in the event Congress hasn’t enacted the appropriations bills, however. Massie has also said in the past that he’s ready to vote for rules even if he’s opposed to the underlying bill.
House Minority Leader Hakeem Jeffries (D-N.Y.) said Sunday on CBS’ Face the Nation that he expects a number of Democrats will support the deal. But he made clear the onus is on Republicans to deliver most of the votes in the House. “It’s my understanding that they are committed to producing at least 150 votes, if not more,” he said. “They were the ones who negotiated this agreement with the White House, and I expect that they will provide a significant number of votes to get it over the finish line.” Still, Jeffries made clear there were reasons for his party to support the measure. If McCarthy can deliver two-thirds of the vote total, that would ensure the 218 votes needed for passage.
Senate timeline. If the measure passes the House on Wednesday, Senate Majority Leader Chuck Schumer (D-N.Y.) told colleagues in a letter on Sunday that he’d immediately start the process of calling it up for a Senate vote. “Due to the time it may take to process the legislation in the Senate without cooperation, Senators should prepare for potential Friday and weekend votes,” Schumer wrote. Senate GOP conservatives including Utah’s Mike Lee and Kentucky’s Rand Paul appeared likely to try to slow down the process. But the threat of weekend votes may be calculated to try to expedite a deal where holdouts receive amendment votes in exchange for speeding up debate. The deal was endorsed by Senate Minority Leader Mitch McConnell (R-Ky.). Even though the bill caps defense spending at the level of Biden’s budget request, which McConnell has deemed insufficient, the Senate GOP leader said the legislation “sets meaningful limits on the administration’s spending agenda. Today’s agreement makes urgent progress toward preserving our nation’s full faith and credit and a much-needed step toward getting its financial house in order,” McConnell said.
Here are some key takeaways of the framework agreement:
- Debt Ceiling Raised Through Jan 1, 2025: The nation’s borrowing cap would be suspended through Jan. 1, 2025, avoiding a default that could occur on June 5. This was Biden’s main objective, as it removes the issue from the political arena until after the 2024 presidential elections.
Two-year Spending Caps: The agreement caps annual discretionary spending for two years, keeping non-defense spending flat next year and increasing it by 1% in 2025. This effectively freezes funding for domestic programs outside of Social Security and Medicare for the next year. Discretionary spending caps would be imposed for six years as part of the agreement, though only enforced by across-the-board cuts during the first two years. Funding would be allowed to grow 1% annually.
In fiscal year (FY) 2024, defense funding would see a roughly 3% increase above the current year, to $886 billion, matching the president’s request. It caps defense spending at $895 billion for fiscal year 2025. Veterans’ medical care is funded at $121 billion for fiscal 2024, while other non-defense discretionary programs get $637 billion, which the White House described as being virtually equal to 2023 when accounting for agreed-upon appropriations adjustments. It also sets budget targets through Fiscal Year 2029. Upshot: McCarthy noted that Republicans were able to permanently sever any link between defense and non-defense spending increases.
All other nondefense discretionary programs would be held roughly flat on average from this year once “adjustments” are factored in, according to the White House, at $637 billion. The total amount of “capped” nondefense spending in fiscal 2024 would be cut by around $40 billion below this year to nearly $704 billion, a 5% reduction. All told, nondefense funding outside of veterans medical care would be cut by about $42 billion or 7% below this year, to $583 billion. But in reality, appropriators are allowed several additions outside of the caps that help make up the difference and keep funding roughly flat from this year.
There is only a “sequester” mechanism for the first two years of the agreement, however. If final spending bills breach the separate defense and nondefense caps, then accounts in those categories would be sliced across-the-board back down to the levels specified in the bill. In future years, the sequester wouldn’t apply.
“Another provision, an “automatic” continuing resolution, would trim spending by 1% below current-year levels as part of stopgap funding needed to avert a partial government shutdown if appropriations bills don’t become law by Jan. 1. The provision applies only to fiscal 2024 and 2025 spending measures. The measure has potential to win conservative support for the deal and was pushed by an influential Republican, Rep. Thomas Massie (R-Ky.), who believes that Congress should follow regular order when conducting its business.
Changes to Work Requirements for Assistance Programs: The deal revamps the Supplemental Nutrition Assistance Program (SNAP) by setting time limits for food stamp recipients who do not meet work requirements. However, it also expands food benefits for homeless individuals and veterans. There are additional work requirements for the Temporary Assistance for Needy Families (TANF) program, but Medicaid is exempt.
The two sides compromised on SNAP changes that would raise the age above which existing work requirements are waived from 49 to 54 — Republicans wanted 55 — for work-capable adults without dependents. The changes would be temporary, expiring in 2030, and veterans and homeless beneficiaries would be exempt from the rules.
The deal would also cut the number of annual exemptions from work requirements states can grant, from 12% of SNAP beneficiaries to 8%, McCarthy said.
The agreement preserves some tightening of existing work requirements for the Temporary Assistance for Needy Families program, but with protections for low-income children.
- Partial Rollback of IRS Funding: The deal cuts the Internal Revenue Service’s budget by $1.4 billion, less than the $80 billion cut in IRS funding that many GOP lawmakers had sought. Then there’s an informal understanding that another $10 billion of the mandatory IRS funding would be repurposed in each of fiscal 2024 and 2025. Some of the IRS funds could be used to mitigate other spending cuts. Impact: Republicans get to claim they successfully cut IRS funding, and Democrats get to use the money to soften other cuts they never wanted.
- Rescinding Unspent Covid-19 Funds: The deal reclaims some $28 billion in unspent pandemic relief approved during both the Biden and Trump presidencies. Despite public health concerns, this rollback includes a $400 million cut from the CDC’s “Global Health Fund.” It claws back unobligated money from dozens of federal programs that received aid during the pandemic, including rental assistance, small business loans and broadband for rural areas. The legislation protects pandemic funding for veterans’ medical care, housing assistance, the Indian Health Service, and some $5 billion for a program focused on rapidly developing the next generation of Covid-19 vaccines and treatments.
Imposition of a one- or two-year time limit to complete environmental reviews for energy projects. Currently, reviews required under the National Environmental Policy Act (NEPA) of 1970 take an average 4.5 years to complete and involve multiple federal agencies. It is unclear how those timelines would be enforced, however. It would designate “a single lead agency” to develop and schedule environmental reviews, in hopes of streamlining the process. It also simplifies some of the requirements for environmental reviews, including placing length limitations on environmental assessments and impact statements.
Agencies will be given one year to complete environmental reviews, and projects that are deemed to have complex impacts on the environment will need to be reviewed within two years.
It includes a measure to expedite completion of the Mountain Valley Pipeline — a major win for West Virginia Sen. Joe Manchin (D) who has long been trying to speed up construction of the natural gas pipeline that had been stalled due to environmental concerns.
- The bill would appropriate a separate $11 billion in each of fiscal years 2024 and 2025 for the Commerce Department’s “nonrecurring expenses funds,” created in the fiscal 2020 spending law (PL 116-93). The money would be used to “carry out programs related to Government efficiencies,” the bill says.
- No New Taxes on Wealthy or Corporations: Despite Biden’s initial goal of limiting spending cuts by raising taxes on wealthy Americans and corporations, the final deal doesn’t address taxation.
- Student Loans: Republicans have long sought to reel back the Biden administration’s efforts to provide student loan relief and aid to millions of borrowers during the coronavirus pandemic. While the GOP proposal to rescind the White House’s plan to waive $10,000 to $20,000 in debt for nearly all borrowers failed to make it into the package, Biden agreed to put an end to the pause on student loan repayment. The pause in student loan repayments would end in the final days of August. The fate of student loan relief, meanwhile, will be decided at the Supreme Court, which is dominated 6-3 by its conservative wing. During oral arguments in the case, several of the justices expressed deep skepticism about the legality of Biden’s plan. A decision is expected before the end of June.
Rep. Dusty Johnson (R-S.D.) on some GOP criticisms of the debt limit deal, on CNN’s State of the Union: “Listen, there will be Freedom Caucus people who vote for this package. So, when you’re saying that conservatives have concerns, it is really the most colorful conservatives. … Those votes were never really in play. We get that. But, overwhelmingly, Republicans in this conference are going to support the deal. How could they not? It is a fantastic deal.”
House Minority Leader Hakeem Jeffries (D-N.Y.) guaranteed that a default would be avoided and predicted the deal would pass, but demurred when asked how many House Dems would back it. “It’s my understanding that [Republicans] are committed to producing at least 150 votes, if not more,” Jeffries said.
Rep. Jim Himes (D-Ct.) said that some in his party could wind up helping Republicans pass the legislation because the measure is a “very, very small bill’’ that falls far short of making the cuts and changes that House Republicans passed last month. “It’s not a bill that’s going to make any Democrats happy, but it’s a small enough bill that in the service of actually not destroying the economy this week may get Democratic votes,’’ Himes said on Fox.