Government showdown of 2023

U.S. President Joe Biden and top congressional Republican Kevin McCarthy have reached a tentative deal to raise the federal government's $31.4 trillion debt ceiling, ending a months-long stalemate, two source familiar with the negotiations said on Saturday.

The White House and negotiators for House Republicans have reached an agreement in principle to avert a debt default, two sources familiar with the situation said.

"But, I’m not sure it’s completely settled. Might be one or two small things they need to finish. But close enough to move forward," the second source said.

Biden and McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal.

The deal would avert an economically destabilizing default, so long as they succeed in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned Fridaywill occur if the debt ceiling is not raised by June 5.


Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, including new work requirements on some benefit programs for low-income Americans and for funds to be stripped from the Internal Revenue Service, the U.S. tax agency.

They said they want to slow the growth of the U.S. debt, which is now roughly equal to the annual output of the country's economy.

Exact details of the final deal were not immediately available, but negotiators have agreed to cap non-defense discretionary spending at 2023 levels for two years, in exchange for a debt ceiling increase over a similar period, sources told Reuters earlier.

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.


The long standoff spooked financial markets, weighing on stocks and forcing the United States to pay record-high interest rates in some bond sales. A default would take a far heavier toll, economists say, likely pushing the nation into recession, shaking the world economy and leading to a spike in unemployment.

Biden for months refused to negotiate with McCarthy over future spending cuts, demanding that lawmakers first pass a "clean" debt-ceiling increase free of other conditions, and present a 2024 budget proposal to counter his issued in March. Two-way negotiations between Biden and McCarthy began in earnest on May 16.

Democrats accused Republicans of playing a dangerous game of brinkmanship with the economy. Republicans say recent increased government spending is fueling the growth of the U.S. debt, which is now roughly equal to the annual output of the economy.

The last time the nation got this close to default was in 2011, when Washington also had a Democratic president and Senate and a Republican-led House.

Congress eventually averted default, but the economy endured heavy shocks, including the first-ever downgrade of the United States' top-tier credit rating and a major stock sell-off.


This time around, House Speaker McCarthy had strengthened his hand by overseeing passage of an April bill that paired $4.8 trillion in spending cuts with a $1.5 trillion debt-ceiling hike. The bill had no chance of passing the Democrat-controlled Senate, but showed that McCarthy had the ability to hold together his thin majority just four months into his top leadership role.

Their work is far from done. McCarthy has vowed to give House members 72 hours to read the legislation before bringing it to the floor for a vote. That will test whether enough moderate members support the compromises in the bill to overcome opposition from both hard-right Republicans and progressive Democrats.

Then it will need to pass the Senate, where it will need at least nine Republican votes to succeed. There are multiple opportunities in each chamber along the way to slow down the process.

The two sides had struggled to find common ground on spending levels. Republicans had pushed for an 8% cut to discretionary spending in the next fiscal year, followed by annual increases of 1% for several years.

Biden had proposed keeping spending flat in the 2024 fiscal year, which starts Oct. 1, and raising it 1% the year after that. He also had called for closing some tax loopholes, which Republicans rejected.

 

Lol

 

in other words, democrats caved to the republican. Again.

Spineless.

 

yay?

2023-05-28T05:10:34.261Z

Biden, McCarthy reach tentative US debt ceiling deal

WASHINGTON, May 27 (Reuters) - U.S. President Joe Biden and top congressional Republican Kevin McCarthy reached a tentative deal to suspend the federal government's $31.4 trillion debt ceiling on Saturday evening, ending a months-long stalemate.

However, the deal was announced without any celebration, in terms that reflected the bitter tenor of the negotiations and the difficult path it has to pass through Congress before the United States runs out of money to pay its debts in early June.

"I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we've come to an agreement in principle that is worthy of the American people," McCarthy tweeted.

Biden called the deal "an important step forward" in a statement, saying: "The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing."

The deal would suspend the debt limit through January of 2025, while capping spending in the 2024 and 2025 budgets, claw back unused COVID funds, speed up the permitting process for some energy projects and includes some extra work requirements for food aid programs for poor Americans.

After months of back-and-forth, the tentative agreement came together in a flurry of calls. Biden and McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal, McCarthy briefed his members later in the evening, and the White House and the House leader spoke afterward.

"We still have more work to do tonight to finish the writing of it," McCarthy told reporters on Capitol Hill. McCarthy said he expects to finish writing the bill on Sunday, then speak to Biden and have a vote on the deal on Wednesday.

Biden and McCarthy 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 -- meaning it will need bipartisan support before the president can sign it.

Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025, a source familiar with the deal said.

"It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach - there are no new taxes, no new government programs," McCarthy said.

The deal will avert an economically destabilizing default, so long as it succeeds in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned on Friday will occur if the debt ceiling issue was not resolved by June 5.

Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, and were sharply critical of the deal as early details were reported.

Republican Representative Bob Good, a member of the conservative House Freedom Caucus, tweeted that he was hearing the deal would raise the debt by $4 trillion, and added "IF that is true, I don’t need to hear anything else. No one claiming to be a conservative could justify a YES vote."

North Carolina's Dan Bishop described the deal earlier Saturday as "utter capitulation in progress. By the side holding the cards."

One high-ranking member of the House Freedom Caucus said they were in the process of gauging member sentiment, and unsure what the vote numbers might be.

TAXES VS. SPENDING CUTS
Republicans say they want to cut spending to slow the growth of the U.S. debt, which is now roughly equal to the annual output of the country's economy. Biden and Democrats have pushed to increase taxes on the wealthy and companies to shrink the debt while increasing spending on programs like free community college.

The long standoff on raising the debt ceiling spooked financial markets, weighing on stocks and forcing the United States to pay record-high interest rates in some bond sales. A default would take a far heavier toll, economists say, likely pushing the nation into recession, shaking the world economy and leading to a spike in unemployment.

Biden for months refused to negotiate with McCarthy over future spending cuts, demanding that lawmakers first pass a "clean" debt-ceiling increase free of other conditions, and present a 2024 budget proposal to counter his budget issued in March.

Two-way negotiations between Biden and McCarthy began in earnest on May 16.

The work to raise the debt ceiling is far from done. McCarthy has vowed to give House members 72 hours to read the legislation before bringing it to the floor for a vote.

That will test whether enough moderate members support the compromises in the bill to overcome opposition from both hard-right Republicans and progressive Democrats to reach a simple majority vote.

Then it will need to pass the Senate, where it will need at least nine Republican votes to succeed. There are numerous opportunities in each chamber along the way to slow down the process.

 

...even money says that enough Republicans scuttle the thing and test the limits of brinkmanship.

...some of them have virtually gotten away scot free with seeing whether or not they could actually overturn fair elections and undergird (at the very least) an attempt to violently overthrow the government...

...why wouldn't some of them see if the United States defaulting on its debt is really this big impending catastrophe all of these liberal tarts say it is?

Don't know that till we know that, right?
America ain't gonna be great again till it's great again, right?

...and to think anybody's wasting time with this dreck, while the Biden Crime Family goes unchallenged and tightens their grip on the seedy d!ck-pic industry...

 

Not surprised. I figured McCarthy wouldn’t want to risk a default.

 

According to the GOP, McCarthy is the spineless one. The GOP primarily wanted spending cuts and they got none.

Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, and were sharply critical of the deal as early details were reported.

Republican Representative Bob Good, a member of the conservative House Freedom Caucus, tweeted that he was hearing the deal would raise the debt by $4 trillion, and added "IF that is true, I don’t need to hear anything else. No one claiming to be a conservative could justify a YES vote."

North Carolina's Dan Bishop described the deal earlier Saturday as "utter capitulation in progress. By the side holding the cards."

 

Both sides will claim victory. Neither side won in all honesty, but if the extreme right wing kills this deal, Biden is completely off the hook, McCarthy is a big loser since he couldn't deliver republican support, and all republicans will completely own the fallout.

 

If MAGA lawmakers anger with the debt ceiling deal bubbles up enough, it could prompt an effort to rescind McCarthy's gavel — a process made easier by the rule changes in January.

 

Funny mccarthy is crowing about ending the hiring of IRS agents. Continues the outright lie (ten year funding of replacement IRS employees, not just auditors and agents). I wonder how much deficit this "win" will add? But fortunately people will get to have longer waits trying to get information, and those that do cheat on their taxes (eg the leading republican candidate for president) will have an easier time getting away with it.

 

So you are saying you would have been cheerleading Biden and switching your public declaration to vote for Trump if Biden had let the deadline pass and the global economy collapsed… just to prove a point (that the media would never repeat) that you don’t negotiate with terrorists??

Either way with you it is Always the Democrats fault and nothing is ever the Republicans fault.

 

I'm not so sure.

In the game of hot potato this puts the ball in the Republican's court for now, but ultimately, no matter who is the trigger man in the case of a default, the consequences would fall on Biden's head in 2024.

My fear is that the extreme right in the House are more interested in punishing Biden than legislating, even if that legislation meets a lot of their desires.

Either way we're about to find out if McCarthy can survive his first big test as speaker.

 

Sarcasm noted.

I give it less than a 50% chance that the extreme MAGA wing is going to vote for this. McCarthy is going to need DEM help.

 

yip, the lawmaker from hicktown, Calif will need help from Dems in the house

 

Very modest. The IRS funding has been great for IRS support. Day and night differences in IRS response time have been reported. The IRA increased the IRS budget by approximately $80 billion over 10 years. It looks like this deal will cancel 1 year of that funding, so around 10% or $8 billion. It's peanuts, really, but the Republicans can claim a much-needed political victory to support this. The spending caps are actually more forward-looking (exactly what the debt limit should be used for), as it means Biden and the Dems can't ask for a non-defense spending increase for FY 2024. This was already the reality with the House under GOP control.


https://www.cnn.com/2023/05/27/politics/whats-in-the-debt-ceiling-deal/index.html

Caps non-defense spending: Under the deal, non-defense spending would remain relatively flat in fiscal 2024 and increase by 1% in fiscal 2025, after certain unspecified adjustments to appropriations were made, according to the source.

After fiscal 2025, there would be appropriations targets, but they would not be enforceable, according to the source.

The House GOP fact sheet says that non-defense discretionary spending would be rolled back to fiscal 2022 levels and topline federal spending would be limited to 1% annual growth for the next six years.

The debt ceiling bill that House Republicans passed last month would return discretionary spending to fiscal 2022 levels and then limit the growth in spending to 1% for a decade. Defense spending would be protected.

Protects veterans’ medical care: The deal would maintain full funding for veterans’ health care and would increase support for the PACT Act’s toxic exposure fund by nearly $15 billion for fiscal year 2024, according to the source.

The House GOP fact sheet says veterans’ medical care would be fully funded.

Expands work requirements: The agreement calls for temporarily broadening of work requirements for certain adults receiving food stamps.

Currently, childless, able-bodied adults ages 18 to 49 are only able to get food stamps for three months out of every three years unless they are employed at least 20 hours a week or meet other criteria. The deal would raise the age to 54, according to the source. The GOP fact sheet says it would apply to those up to age 55.

However, the deal would also expand exemptions for veterans, people who are homeless and others in the Supplemental Nutrition Assistance Program, or SNAP, as food stamps are formally known.

And all the changes would end in 2030.

The agreement would also make changes to the current work requirements in the Temporary Assistance for Needy Families program.

Work requirements would not be introduced in Medicaid, which House Republicans had called for in their debt ceiling bill.

Claw back unspent Covid-19 relief funds: The deal would rescind unobligated funds from the Covid-19 relief packages that Congress passed to respond to the pandemic, according to the House GOP fact sheet.

Estimates on how much of the roughly $4.5 trillion in relief remains vary.

Cut Internal Revenue Service funding: The agreement would cancel the total fiscal year 2023 staffing funding request that the House GOP says would go for new IRS agents, according to the fact sheet.

House Republicans have been determined to cancel the roughly $80 billion in IRS funding contained in the Inflation Reduction Act that Democrats passed last year. The GOP lawmakers argue that the money will be used to hire an army of new agents to audit Americans, but the agency says it will also be used to support operations, modernize customer service technology and assist taxpayers.

Restart student loan repayments: The deal would require borrowers to pay back their student loans again, according to the House GOP fact sheet, although when repayments would start is not specified. They have been paused since the Covid-19 pandemic began.

However, the agreement would maintain Biden’s plan to provide up to $20,000 in debt relief for qualifying borrowers, the source said. The measure is currently before the Supreme Court, which is expected to rule on it in coming weeks.

 

There was never going to be a default. Let me say it again. There was never going to be a default.

 

Nobody won anything. This was normal Washington politics. Never let a good crisis go to waste...even if the crisis was fantasized.