By Jarrett Renshaw
WASHINGTON (Reuters) – U.S. President Joe Biden and House Republican Speaker Kevin McCarthy are close to reaching a deal to raise the debt ceiling that would cut U.S. part of federal spending.
Although the negotiations are progressing smoothly, the general outline of the transaction has already taken shape. Here’s what we know so far:
Cap on discretionary spending
The deal being considered would raise the debt ceiling in exchange for moving non-defense discretionary spending to remain at current levels around the annual level.
The U.S. government will use 885, management offices, and budget estimates for funding for housing, education, road safety, and other federal programs.
Keeping the figure roughly flat for two years would amount to a cut given the impact of inflation, Democrats said.
for 2024 elections
The extension of the debt limit may continue until 2023, which means Congress doesn’t need to tackle the cap issue again until after the presidential election.
This would prevent another political showdown that unnerves global investors and markets until a Republican is elected president or Biden wins re-election.
Increased Defense Spending
Transactions under consideration could increase Defense Spending to approximately 200 $Billion , consistent with Biden’s budget 2023 budget spending proposal.
an increase of 10% over the allocated 200 billion dollars in in the current budget.
Move special IRS funds
Biden and Democrats get 40 BILLIONS New funding in dollars, for a decade to help the IRS enforce tax laws for wealthy Americans in last year’s Lower Inflation Act, a move the administration says will come next
200 billion in additional revenue years.
The deal would move most of the money into “discretionary spending” allocated under the act as “mandatory spending” to exempt it from annual budgeting The process of political struggle is governed by Congress.
The IRS plans to use the money to hire thousands of new agents, and the extra tax they generate is expected to offset the massive climate-friendly tax credits. Republicans argue that auditors will ultimately target middle America, though the Treasury Department and Biden have said they will focus on high-income households.
Biden and McCarthy are expected to agree to claw back unspent COVID relief funds as part of a budget deal, including funds set aside for vaccine research and Disaster relief. The estimated amount of unused funds is between $40 and $70 billion dollars.
Biden and McCarthy have been discussing tightening work requirements for low-income Americans to access food and other social programs, but have struggled to find common ground.
Discussion focused on the Supplemental Nutrition Assistance Program (SNAP), the federal Nutrition Assistance Program covering 40 ) million people, and Temporary Assistance to Needy Families (TANF), a time-limited program that helps families with children whose parents or other relatives are unable to provide for basic needs.
The idea has been met with fierce opposition from progressive members of Biden’s Democratic Party, who have said they would not support a deal with such a move.
A scheme to streamline energy projects, including those based on fossil fuels, is expected to be part of any budget deal. McCarthy and Republicans have identified it as one of the pillars of any deal, with the White House backing the plan earlier this month.
However, the two sides are still discussing the final details.
A bill that would facilitate power transmission between U.S. regions is being considered as part of negotiations, Reuters reported on Thursday. The measure could be combined with slight changes to the National Environmental Policy Act, or NEPA, a cornerstone of U.S. environmental law that governs environmental reviews of projects such as roads and pipelines.