While President Joe Biden and House Speaker Kevin McCarthy have finalized a deal that would raise the national debt ceiling and avoid a default, there is still hard work ahead.
Mainly, convincing the House and Senate to pass the deal.
The proposal will go to Congress on Wednesday as the federal government faces a June 5 deadline to avoid a catastrophic default, which would be the first in U.S. history.
The country’s federal debt currently stands at $31.4 trillion.
Here are some of the key elements in the deal that will be presented to Congress this week.
2-year debt increase
The deal reached by Biden and McCarthy would raise the debt ceiling for two years, taking it beyond the 2024 election, The New York Times reported. Republicans originally proposed a one-year deal. The two-year window allows both parties, which are vying for control of the White House and Congress via the 2024 elections, to potentially be in a stronger political position in 2025, according to the newspaper.
Capping federal spending
The deal will keep non-military spending essentially flat for the 2024 fiscal year after factoring in appropriations adjustments, according to The Wall Street Journal. The deal also places a 1% cap on spending increases for the 2025 fiscal year, according to the newspaper.
Programs besides Social Security and Medicare -- such as scientific research, nutritional aid for mothers and rental aid -- will be held at its 2023 level and increase by 1% in 2025, the Times reported.
To do that, Biden agreed to cut back on a portion of the $80 billion Congress approved last year for the expansion of the Internal Revenue Service, according to The Washington Post. The deal shifts $10 billion that the IRS had planned to use to boost tax enforcement and modernize its technology, The Wall Street Journal reported.
The agreement would protect the military from spending cuts, according to the Times. Meanwhile, the deal will fully fund medical care for veterans at the levels in Biden’s proposed 2024 budget, The Associated Press reported.
The agreement would fully fund medical care for veterans at the levels included in Biden’s proposed 2024 budget blueprint, including a fund dedicated to veterans who have been exposed to toxic substances or environmental hazards, according to the news organization.
The White House agreed to a key Republican demand by tightening work requirements for federal aid, The Wall Street Journal reported. The deal temporarily raises the age of people who must work to receive food aid through the Supplemental Nutrition Assistance Program (SNAP), to 54, according to the newspaper.
That is a hike from the current age requirement of 49, but the changes will expire in 2030, the AP reported. Currently, childless, able-bodied adults ages 18 to 49 can receive food stamps for three months out of every three years unless they are employed at least 20 hours a week, according to CNN.
The GOP wanted sweeping changes to those programs and also to Medicaid, The Washington Post reported. The deal struck Saturday does not include additional work requirements for Medicaid, according to the newspaper.
Unspent COVID-19 money
The agreement rescinds about $30 billion in unspent COVID-19 relief money that Congress approved through previous bills, according to the AP. The exceptions are for veterans’ medical care, housing assistance and the Indian Health Service. Approximately $5 billion will still be earmarked for a program focused on rapidly developing the next generation of COVID-19 vaccines and treatments.
The Republican proposal to rescind the White House’s plan to waive $10,000 to $20,000 in debt for nearly all borrowers did not make it into the compromise deal. However, Biden agreed to end the pause of student loan repayments, the AP reported.
Once the bill is signed into law by the president, the pause in student loan repayments would end within 60 days.
The deal puts into place changes in the National Environmental Policy Act for the first time in nearly four decades, according to the AP. The streamlining process would affect environmental permitting, and a single lead agency would be in charge of developing a single review document, the Times reported.
The agreement would not make any changes to the Inflation Reduction Act’s climate and clean energy provisions, CNN reported.