One by one, the main points of the Biden-McCarthy debt ceiling agreement

Before the debt ceiling deal between Joe Biden and Kevin McCarthy became known, McCarthy anticipated that the final product would not be to everyone's liking. After all, it was the fruit of almost a month of negotiations. The text must be approved by both houses of Congress and was described by the Speaker as"worthy of the American people."

Janet Yellen threw a lifeline to Capitol Hill last Friday when she stretched the deadline for both sides to reach an agreement. It went from June 1 to June 5, giving lawmakers some breathing room in the race to keep the United States from defaulting for the first time in its history.

A little more than 24 hours later, Biden and McCarthy announced the long-awaited agreement, in principle, although the headache is far from over. Now they must convince enough members of Congress to pass it in both houses, which looks complex from the outset because the final product included provisions that were not very palatable to both sides of the aisle. Both tried to claim the victory on social networks, and the agreement's details have already begun to emerge. According to what House Republicans and the White House were leaking to the press, these are the main points of the agreement:

Increase in debt ceiling and spending limit

As embodied in the Limit, Save and Grow Act of 2023, the Republicans' main argument was that the debt ceiling increase be tied to a spending limit. As reported by CNN, the agreement stipulates that the debt ceiling will be raised for two years. The report also calls for non-defense discretionary spending to be reduced to FY 2022 levels and for core federal spending to be limited to 1 percent annual growth for the next six years. The only expenditure that will remain unchanged will be defense.

After adjustments are taken into account, the agreement will call for spending $886 billion on defense, $121 billion on veterans' health care, and $637 billion on other non-defense programs.

Expansion of work requirements

The agreement will also require the temporary extension of work requirements for certain adults receiving food stamps in the Supplemental Nutrition Assistance Program (SNAP). The main modification lies in the age range stipulations for the program. Currently, healthy childless adults between 18 and 49 can obtain food stamps for three months and every three years. The agreement would raise the age to 54 or 55.

In addition, changes will also be made to the current work requirements in the Temporary Assistance for Needy Families program, although, to the anger of House Republicans, those for Medicaid will remain intact. Many of these provisions will expire in 2030, allowing their effectiveness to be measured and modified if necessary.

Unspent Covid-19 funds

According to the fact sheet that House Republicans disclosed, the deal would rescind about $30 billion in unspent coronavirus relief money, provided Congress had approved it in previous bills. Exceptions include some of that money for veterans' health care, housing assistance, the Indian Health Service and about $5 billion for a program aimed at the rapid development of vaccines and treatments for the virus.

Student loans

GOP negotiators failed to defeat Biden's bill to forgive student debt, although they did succeed in restarting repayment of these loans, which had been on hold since the pandemic began. Repayment would begin in late summer.

On his part, Biden secured relief of up to $20,000 for qualifying loans. Of course, everything will be subject to the decision of the Supreme Court, which is currently evaluating the legality of the President forgiving student debt through an executive order. The decision is expected to be made public by the end of June.

IRS

The GOP wants nothing to do with the $80 billion that the Inflation Reduction Act, passed by Democrats in 2022, would allocate to the Internal Revenue Service (IRS). In the debt ceiling deal, they managed to cancel the FY 2023 staffing funding request, which they argued would end up in an arsenal of new agents for the agency meant to collect federal taxes.

Energy and environment

To the delight of progressive Democrats, the deal would make no changes to the climate and clean energy provisions included in the Inflation Reduction Act, which Republicans sought to repeal. In turn, changes to the National Environmental Policy Act(NEPA) would be implemented. For the first time in 40 years, "a single lead agency" would be allowed to perform NEPA reviews.