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| What's in US debt ceiling deal and who won? | What's in US debt ceiling deal and who won? |
| (1 day later) | |
| The two parties finally reached a deal after weeks of trying | The two parties finally reached a deal after weeks of trying |
| President Joe Biden has urged Congress to pass a bill to raise the government's borrowing limit and prevent a potentially catastrophic default on US debt repayments. So what's in the deal and which party is happier with it? | |
| If approved, it would allow the federal government to borrow money until after the next presidential election in November 2024. | |
| The House of Representatives passed the 99-page bill on Wednesday, and it now heads to the Senate. | |
| Here are the highlights from the package, with analysis by BBC North America correspondent Nomia Iqbal. | |
| Debt ceiling suspended until 2025 | Debt ceiling suspended until 2025 |
| Every so often, US Congress must vote to raise or suspend the ceiling, so it can borrow more to pay its bills. Currently it is $31.4tn (£25tn). | Every so often, US Congress must vote to raise or suspend the ceiling, so it can borrow more to pay its bills. Currently it is $31.4tn (£25tn). |
| This includes paying for federal employees, the military, Social Security and Medicare, as well as interest on the national debt and tax refunds. | This includes paying for federal employees, the military, Social Security and Medicare, as well as interest on the national debt and tax refunds. |
| A simple guide to the debt ceiling | A simple guide to the debt ceiling |
| Could a US debt default unleash global chaos? | Could a US debt default unleash global chaos? |
| But in recent years, this has become increasingly difficult, because the two sides cannot agree on the terms. | But in recent years, this has become increasingly difficult, because the two sides cannot agree on the terms. |
| In the deal passing through Congress, they have not raised the limit to a certain level, but suspended it entirely until 2025. | |
| This allows them to pay their bills until that date and know that the next fight over raising the ceiling will not interfere with the presidential election. | This allows them to pay their bills until that date and know that the next fight over raising the ceiling will not interfere with the presidential election. |
| And the rest of the world can breathe a sigh of relief if the deal is signed because a US default would have a global impact. | And the rest of the world can breathe a sigh of relief if the deal is signed because a US default would have a global impact. |
| Watch: Debt bill needs coalition of moderates to pass | Watch: Debt bill needs coalition of moderates to pass |
| Watch: Debt bill needs coalition of moderates to pass | Watch: Debt bill needs coalition of moderates to pass |
| Caps on spending, but not defence | Caps on spending, but not defence |
| Republicans wanted a freeze on overall spending for 10 years, with a rise in defence spending and cuts to other budgets. | Republicans wanted a freeze on overall spending for 10 years, with a rise in defence spending and cuts to other budgets. |
| The agreement keeps non-defence spending flat next year, with a 1% rise in 2025. The implications of this belt tightening is as yet unclear. | The agreement keeps non-defence spending flat next year, with a 1% rise in 2025. The implications of this belt tightening is as yet unclear. |
| Defence spending would increase to $886bn, which amounts to a 3% rise on this year. | Defence spending would increase to $886bn, which amounts to a 3% rise on this year. |
| There are no budget caps after 2025. | There are no budget caps after 2025. |
| The White House estimates government spending would be reduced by at least $1tn, says AP News, but official calculations have not yet been released. | The White House estimates government spending would be reduced by at least $1tn, says AP News, but official calculations have not yet been released. |
| Full funding for the medical care of military veterans would also increase, in line with what President Biden had sought. | Full funding for the medical care of military veterans would also increase, in line with what President Biden had sought. |
| Nomia: Both sides claim victory here. The White House says these cuts are not significant. The defence spending rise is what President Biden wanted but it's below the rate of inflation and doesn't meet the demands of the more hawkish Republicans. | Nomia: Both sides claim victory here. The White House says these cuts are not significant. The defence spending rise is what President Biden wanted but it's below the rate of inflation and doesn't meet the demands of the more hawkish Republicans. |
| Unspent Covid funds returned | Unspent Covid funds returned |
| With the public health emergency officially ended in May, Republicans had argued for the relief funds that were not spent to be returned. | With the public health emergency officially ended in May, Republicans had argued for the relief funds that were not spent to be returned. |
| The Congressional Budget Office has estimated this will amount to about $30bn. | The Congressional Budget Office has estimated this will amount to about $30bn. |
| Nomia: A win for Republicans. Many Democrats were concerned public health initiatives would be impacted by this, but it was easier for Biden to give up than other Republican priorities like Medicaid work requirements. | Nomia: A win for Republicans. Many Democrats were concerned public health initiatives would be impacted by this, but it was easier for Biden to give up than other Republican priorities like Medicaid work requirements. |
| Welfare tinkered with, but no overhaul | Welfare tinkered with, but no overhaul |
| A central demand of Republicans was to toughen up the distribution of welfare benefits by attaching strings that would mean able-bodied recipients having to work to get food and healthcare help. | A central demand of Republicans was to toughen up the distribution of welfare benefits by attaching strings that would mean able-bodied recipients having to work to get food and healthcare help. |
| Democrats were adamant this should not be on the table. | Democrats were adamant this should not be on the table. |
| What Danes can teach the US about its debt crisis | What Danes can teach the US about its debt crisis |
| The welfare being looked at by Republicans included Medicaid (health coverage for poor Americans), the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). | The welfare being looked at by Republicans included Medicaid (health coverage for poor Americans), the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). |
| Medicaid remains untouched in the deal, but the age at which work requirements are included for those on SNAP was raised from 50 to 54. | Medicaid remains untouched in the deal, but the age at which work requirements are included for those on SNAP was raised from 50 to 54. |
| Nomia: The White House will be happy it gained exceptions to the food stamp requirements for veterans and people who are homeless but stricter work requirements overall are a win for Republicans. It will be a hard sell for progressive Democratic lawmakers. | Nomia: The White House will be happy it gained exceptions to the food stamp requirements for veterans and people who are homeless but stricter work requirements overall are a win for Republicans. It will be a hard sell for progressive Democratic lawmakers. |
| Watch: The debt ceiling explained - in under 90 seconds | Watch: The debt ceiling explained - in under 90 seconds |
| Watch: The debt ceiling explained - in under 90 seconds | Watch: The debt ceiling explained - in under 90 seconds |
| Funds to enforce tax rules on wealthy Americans | Funds to enforce tax rules on wealthy Americans |
| A win for Democrats was securing $80bn for a decade to help the Internal Revenue Service (IRS) to enforce the tax code in last year's Inflation Reduction Act on the richest. | A win for Democrats was securing $80bn for a decade to help the Internal Revenue Service (IRS) to enforce the tax code in last year's Inflation Reduction Act on the richest. |
| Nomia: The Republicans wanted to dump the £80bn in IRS funding, claiming it would be used to hire an army of agents to audit Americans - the agency said it would also be used to modernise the system. Instead - in showcasing his deal-making skills - Biden agreed to cut $20bn but divert that cash to other non-defence spending. | Nomia: The Republicans wanted to dump the £80bn in IRS funding, claiming it would be used to hire an army of agents to audit Americans - the agency said it would also be used to modernise the system. Instead - in showcasing his deal-making skills - Biden agreed to cut $20bn but divert that cash to other non-defence spending. |
| Easier to get energy project permits | Easier to get energy project permits |
| New rules will make it easier for both fossil fuel and renewable energy projects to get licences. | New rules will make it easier for both fossil fuel and renewable energy projects to get licences. |
| This has long been advocated by Democratic Senator Joe Manchin of West Virginia. | This has long been advocated by Democratic Senator Joe Manchin of West Virginia. |
| It will basically streamline the environmental review process and potentially get projects off the ground in a faster time. | It will basically streamline the environmental review process and potentially get projects off the ground in a faster time. |
| Nomia: A win and a loss for the White House. Both parties agree it takes far too long for new energy infrastructure to be built but disagree on what projects should be prioritised. Republicans want more gas pipelines and fossil fuel projects; Democrats want more clean energy. This could be another red line for progressive Democrats. | Nomia: A win and a loss for the White House. Both parties agree it takes far too long for new energy infrastructure to be built but disagree on what projects should be prioritised. Republicans want more gas pipelines and fossil fuel projects; Democrats want more clean energy. This could be another red line for progressive Democrats. |
| Things not in the deal | Things not in the deal |
| Student loan relief | Student loan relief |
| Republicans had wanted the Biden plan to forgive student debt to be rescinded but it survived. | Republicans had wanted the Biden plan to forgive student debt to be rescinded but it survived. |
| Nomia: The Biden administration's student debt case will be ultimately decided by the Supreme Court. But the bill does require the Biden administration to follow through with a plan to end the current pause - which has been in effect since the start of the pandemic - on student loan repayments by the end of summer. | Nomia: The Biden administration's student debt case will be ultimately decided by the Supreme Court. But the bill does require the Biden administration to follow through with a plan to end the current pause - which has been in effect since the start of the pandemic - on student loan repayments by the end of summer. |
| Tax hikes | Tax hikes |
| Democrats had targeted wealthy Americans for new tax hikes but there are no new taxes here. | Democrats had targeted wealthy Americans for new tax hikes but there are no new taxes here. |
| Nomia: House Democrats will be fuming about this. They were already critical that the White House did not make taxes on the rich and powerful the centrepiece of their talks. | Nomia: House Democrats will be fuming about this. They were already critical that the White House did not make taxes on the rich and powerful the centrepiece of their talks. |
| Clean energy | Clean energy |
| Republicans had wanted to repeal key provisions of the Inflation Reduction Act's clean energy and climate provisions but it was unscathed. | Republicans had wanted to repeal key provisions of the Inflation Reduction Act's clean energy and climate provisions but it was unscathed. |
| Nomia: A win for both - certainly as far as environmentalists are concerned. The US renewable energy industry group the American Clean Power Association said it "applauds President Joe Biden and Speaker Kevin McCarthy for prioritising national interests over partisan politics". | Nomia: A win for both - certainly as far as environmentalists are concerned. The US renewable energy industry group the American Clean Power Association said it "applauds President Joe Biden and Speaker Kevin McCarthy for prioritising national interests over partisan politics". |
| Related Topics | Related Topics |
| Joe Biden | Joe Biden |