Debt limit deal hits turbulence in Congress as leaders prep for vote
U.S. House Speaker Kevin McCarthy, a California Republican, holds a press conference inside the U.S. Capitol’s Statuary Hall on the debt limit and government spending negotiations on Wednesday, May 24, 2023. (Photo by Jennifer Shutt / States Newsroom)
WASHINGTON — Congress began moving the bipartisan debt limit package forward Tuesday, though frustrations with provisions in the bill could make for narrow passage in the U.S. House and U.S. Senate.
Conservative Republicans and progressive Democrats both aired their disappointment with the agreement forged over the weekend, but only GOP lawmakers are looking to possibly remove Kevin McCarthy as speaker because of the deal.
U.S. House Freedom Caucus Chair Scott Perry said Tuesday that conservative Republicans will do whatever they can to block the legislation, arguing the agreement “totally fails to deliver” on conservative priorities.
Perry, a Pennsylvania Republican, declined to directly answer questions about whether the group of about a dozen conservative lawmakers at the press conference would use the so-called motion to vacate to remove McCarthy as speaker.
“I am focused on defeating this bill,” Perry said. “What happens post that … we will decide once we’ve determined the disposition of this bill.”
Texas GOP Rep. Chip Roy said there will be a “reckoning” if the debt limit package moves forward following a floor vote and North Carolina Rep. Dan Bishop indicated he may move for the floor vote to oust McCarthy as speaker.
The House is expected to vote on Wednesday around 8:30 p.m. Eastern to send the legislation to the Senate, where lawmakers need to approve the measure before Monday. Treasury Secretary Janet Yellen warned last week that if the debt limit is not addressed before that date, the country would begin a default.
The House Rules Committee took up the bill Tuesday afternoon, a requirement for all major legislation heading to the floor. The House must vote Wednesday to approve the rule before it can move on to formally debate and vote on the bill.
Concern among progressives
Democrats will be key to moving the bill through the Republican-controlled House, even if some of their members are not entirely happy with the outcome.
Congressional Progressive Caucus Chair Pramila Jayapal said Tuesday the group was undergoing its whip count and determining whether to take an official position on the package.
Jayapal, a Washington Democrat, said the Republican Party “did not win any major concessions on spending” in the agreement, but said the legislation does include some provisions she is “seriously concerned about.”
Jayapal said she is in talks with the White House about how exactly the handshake agreements that aren’t included in bill text would work, especially the promise that some of the funds being clawed back will be redirected to domestic spending in the annual appropriations bills.
She also expressed concerns about the changes to work requirements for two federal safety net programs — Temporary Assistance for Needy Families and Supplemental Nutrition Assistance Program — and for energy permitting.
“That is a significant problem,” Jayapal said. “I’ve said before that the United States is the only industrialized country that puts these kinds of bureaucratic red tape requirements on people who are just trying to get food for their families.”
Office of Management and Budget Director Shalanda Young, who had a heavy hand in negotiations, said during a White House press briefing Tuesday the deal “represents a compromise, which means no one gets everything that they want, and hard choices had to be made.”
Young said the agreement with House Republican leaders protects key legislative priorities of the Biden administration, such as the climate provisions in the Inflation Reduction Act.
Here’s a look at what’s in the 99-page bill:
Debt limit: It would suspend the nation’s debt limit through Jan. 1, 2025, meaning whoever wins the 2024 presidential election will likely negotiate the next agreement with that Congress.
Federal government spending levels: The agreement would cap discretionary spending at $886.35 billion for defense and $703.65 billion for nondefense during fiscal 2024, set to begin Oct. 1. That’s about a 3% increase for defense and roughly flat funding for nondefense.
Spending levels for the following fiscal year, 2025, would be set at $895.21 billion for defense and $710.69 billion for nondefense. That would represent about a 1% boost for nondefense accounts.
Discretionary spending accounts for about one-third of federal spending while mandatory spending on programs like Medicare, Medicaid and Social Security make up the other two-thirds.
Nondefense accounts fund the vast majority of federal departments and agencies, including Agriculture, Homeland Security and Veterans Affairs, while defense funding goes predominantly to the Pentagon.
Some of the spending on nondefense programs would be paid for by moving around, or repurposing, unspent COVID-19 funding and part of the $80 billion Democrats approved last year for the Internal Revenue Service.
In order to actually achieve those spending levels, the House, Senate and Biden administration must reach agreement on all dozen of the annual appropriations bills in the months ahead.
Tax code: The deal doesn’t include any changes to the tax code, something President Joe Biden pushed for but McCarthy rejected.
Work requirements: The legislation doesn’t alter Medicaid eligibility, but it does make changes to the Temporary Assistance for Needy Families program and the Supplemental Nutrition Assistance Program. Changes to all three were pushed for by Republicans.
TANF recipients could experience some changes to the program on Oct. 1, 2024, while others would go into place a year later on Oct. 1, 2025.
The program now requires states to have 50% of TANF recipients working, though states can lower that threshold based on how much their caseload has fallen since 2005, according to a White House official.
This legislation would set that year to 2015, give states two years to implement the changes and “allow states to do things like spending additional TANF dollars and in exchange being able to get a lower work participation rate because of that,” according to the White House official.
SNAP’s current work requirements for many able-bodied adults extend from age 18 through 49. This bill text says it would raise the ceiling to age 51 during the current fiscal year, to age 53 during the fiscal year slated to begin Oct. 1 and to 55 during fiscal 2025.
Veterans, homeless individuals and people 24 or younger who were in the foster care system when they turned 18 wouldn’t be subject to SNAP’s time limits, according to the White House.
The changes to SNAP would sunset on Oct. 1, 2030.
Energy permitting: Members of both political parties have expressed interest in overhauling how the federal government permits energy projects under the National Environmental Policy Act, known as NEPA.
NEPA requires federal agencies to consider the environmental effects of major federal actions, and the process can take years. Democrats have sought to speed construction for renewable energy projects, and Republicans have complained for years that the burdens of federal permitting restrict development.
The bill amends NEPA by limiting requirements on some projects and requires environmental reviews to be completed in a one-to-two-year time frame.
Separately, the White House agreed to streamline permits for the more than $6 billion Mountain Valley Pipeline, a decision that has angered environmentalists and climate conscious Democrats.
West Virginia’s Sens. Joe Manchin III, a centrist Democrat, and Shelley Moore Capito, a Republican, have lobbied for the approval of the outstanding permits for the more than 300 miles of Mountain Valley Pipeline, also known as MVP, that would deliver gas from West Virginia into Virginia.
As part of the deal, the White House agreed to expedite permits for the long-disputed Appalachian natural gas pipeline, which has been on halt due to court cases brought on by environmentalists who have fought for years to prevent its construction.
Permits for the Mountain Valley Pipeline will be issued within 21 days after the debt ceiling bill is signed into law, according to the bill text. It also bars any judicial review of permits issued for the pipeline project by any government agency.
“I am pleased Speaker McCarthy and his leadership team see the tremendous value in completing the MVP to increase domestic energy production and drive down costs across America and especially in West Virginia,” Manchin, the chair of the Senate Energy and Natural Resources panel, said in a statement. “I am proud to have fought for this critical project and to have secured the bipartisan support necessary to get it across the finish line.”
The MVP has had more than 500 violations in state environmental laws, regulations and permit conditions, according to a report by the environmental group Appalachian Voices.
COVID-19 funds: The agreement rescinds, or claws back, about $28 billion in some of the unspent federal funding that was approved during the COVID-19 pandemic.
Federal student loan repayment pause: The bill would codify the end of the pause on federal student loan repayments by August and bar the administration from reinstating a pause on repayments unless approved by Congress.
The Biden administration announced last year its plans to resume requiring repayments on student loans either after the Supreme Court’s decision on the administration’s student debt cancellation policy or 60 days after June 30.
A pause on student loan repayments was first enacted in 2020 by the Trump administration due to the coronavirus pandemic, and later extended by the Biden administration.
The Biden administration’s one-time student debt cancellation has been a target for Republicans. Last week, the House voted to overturn the policy that would cancel up to $20,000 in federal student loan debt for borrowers who qualify. The Senate is expected to vote on the resolution of disapproval this week, where if passed, it would block the policy. The White House has vowed to veto it.
Internal Revenue Service funding: The agreement would allow Congress to pull $10 billion during fiscal 2024 and another $10 billion during fiscal 2025 from the IRS to pay for other domestic spending initiatives, according to the White House.
The money would come from the $80 billion boost to the IRS that Democrats approved last August as part of their signature climate change, health care and tax package known as the Inflation Reduction Act, or IRA.
The $20 billion claw back provision is not in the bill text, which only includes a $1.39 billion rescission to that IRS funding.
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