White House officials and Republican lawmakers are close to reaching a deal that would raise the US debt limit for two years while imposing strict caps on discretionary spending not related to the military or veterans for the same period. The deal would allow Republicans to say they were reducing federal spending, while spending on the military and veterans’ programs would continue to grow, and allow Democrats to say they had spared most domestic programs from significant cuts. Negotiators from both sides are drafting legislative text, but some details remain in flux. The compromise, if agreed upon and enacted, would raise the government’s borrowing limit for two years, past the 2024 election.
Based on The New York Times, top White House officials and Republican lawmakers are closing in on a deal that would raise the debt limit for two years while imposing strict caps on discretionary spending not related to the military or veterans for the same period. The deal is being rushed to avert a federal default that is projected in just one week.
The proposed deal would allow Republicans to claim that they were reducing some federal spending, while spending on the military and veterans’ programs would continue to grow. Democrats, on the other hand, would be able to say that they had spared most domestic programs from significant cuts.
Negotiators from both sides were talking into the evening and beginning to draft legislative text, though some details remained in flux. Based on The New York Times, the compromise, if agreed upon and enacted, would raise the government’s borrowing limit for two years, past the 2024 election.
The United States hit the legal limit, currently $31.4 trillion, in January and has been relying on accounting measures to avoid defaulting since then. The Treasury Department has projected it will exhaust its ability to pay bills on time as early as June 1.
In exchange for lifting the debt limit, the deal would meet Republicans’ demand to cut some federal spending, albeit with the help of accounting maneuvers that would give both sides political cover for an agreement likely to be unpopular with large swaths of their base voters.
The proposed deal would impose caps on discretionary spending for two years, though those caps would apply differently to spending on the military than to nondefense discretionary spending. Spending on the military would grow next year, as would spending on some veterans’ care that falls under nondefense discretionary spending. The rest of nondefense discretionary spending would fall slightly — or roughly stay flat — compared with this year’s levels.
The deal would also roll back $10 billion of the $80 billion Congress approved last year for an I.R.S. crackdown on high earners and corporations that evade taxes.
“We’ve been talking to the White House all day, we’ve been going back and forth, and it’s not easy,” said Kevin McCarthy, the House minority leader, as he left the Capitol on Thursday evening, declining to divulge what was under discussion. “It takes a while to make it happen, and we are working hard to make it happen.”
The proposed deal, if agreed upon, would be a significant achievement for President Biden, who has been pushing for a bipartisan agreement to raise the debt limit and avoid a default. It would also be a significant achievement for Republicans, who have been pushing for spending cuts and fiscal responsibility.
However, the proposed deal is likely to face opposition from some members of both parties. Democrats may object to the spending cuts, while Republicans may object to the accounting maneuvers that would be used to achieve them.
To end on a high note, the proposed deal represents a compromise between the two parties, with each side giving up something in order to achieve a larger goal. If it is agreed upon and enacted, it would be a significant achievement for both parties and for the country as a whole.