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President Biden and House Speaker Kevin McCarthy announced Saturday night that they had reached a deal to raise the debt ceiling and avert a catastrophic federal default with a bit over a week to go before the deadline.
Afterwards, a quick consensus formed among much of the right and left: Republicans got blanked.
The agreement would temporarily freeze a portion of non-defense spending, while temporarily tightening the food stamp program’s work requirements for childless adults, and enacting modest changes to Temporary Assistance for Needy Families.
The early details prompted furious reactions from members of the hard-right House Freedom Caucus, who’d hoped to extract vastly more sweeping budget cuts and changes to the federal safety net in return for hiking the borrowing limit.
“This ‘deal’ is insanity,” tweeted South Carolina Rep. Ralph Norman. “A $4T debt ceiling increase with virtually no cuts is not what we agreed to.” North Carolina Rep. Dan Bishop tweeted a vomiting emoji after a GOP conference call, and complained about “RINOs congratulating McCarthy for getting almost zippo.”
“Hard pass. Hold the line,” offered Georgia Rep. Andrew Clyde. Texas Rep. Chip Roy, widely viewed as the Freedom Caucus’ intellectual leader, called the agreement a “turd sandwich.”
Democratic politicians generally avoided spiking the football — the White House soberly described the deal as “an important step forward that reduces spending while protecting critical programs for working people.” But reviews from pundits were more blunt. As Dan Pfeiffer of Pod Save America put it: "The devil is very much in the details, but it seems like President Biden and his team outplayed McCarthy."
The White House did in fact make some real concessions to McCarthy, but with at least one notable exception, they mostly don’t look that far off from what you might have expected out of a normal budget negotiation where Republicans controlled the House.
As Josh Marshall of Talking Points Memo put it, it’s a bit like they walked into a Denny’s with a gun, demanded all the money in the cash register, and left with a breakfast instead. Extraordinary threats at the start, an ordinary transaction at the finish.
The deal would raise the debt ceiling until the beginning of 2025. In return, it roughly freezes most non-defense discretionary spending next year, and allows it to grow 1 percent in 2025, followed by additional years of non-enforceable targets. At the same time, it would raise Pentagon and veterans spending in line with Biden’s budget requests.
That’s not nothing. Taking inflation into account, it amounts to a sizable cut for a section of the budget that includes priorities like transit, science, and some social welfare spending. It creates a bigger wedge between the growth of defense and non-defense spending as well, a win for Republicans.
In order to protect the non-defense discretionary budget, Democrats are also being forced to cut from other pots of federal spending. Most notably, they’re rescinding a large hunk of unspent COVID relief, and clawing back $20 billion of the additional $80 billion they invested in the Internal Revenue Service as part of the Inflation Reduction Act. White House sources suggested this won't stop the administration’s plans to modernize the agency and crack down on tax cheats in the near term — the cuts could be concentrated in later years — but it’s a significant loss that Democrats might have had to swallow in a normal budget showdown.
House Republicans are also reasserting their influence over the budget after getting entirely cut out of negotiations on last year’s omnibus spending package — which infuriated conservatives by raising non-defense discretionary spending by 6.7 percent. Senate Republican leaders pretty openly chose to strike that deal with Democrats last winter, rather than wait for the GOP to take over the lower chamber, in part because they didn’t trust McCarthy could control his conference well enough to negotiate with the White House. He’s so far proven those concerns unfounded.
But broadly speaking, the agreement is not radically different from the kinds of 2-year budget deals Congress passed during the Obama and Trump eras. In comparison, the party-line bill House Republicans passed would have slashed about $130 billion from non-defense discretionary spending and capped its growth for 10 years.
Republicans also failed to achieve other moonshot goals as well, like repealing Biden’s green energy subsidies from the Inflation Reduction Act, or putting new work requirements on Medicaid.
McCarthy has bragged about forcing the White House to negotiate over the debt limit after it spent months saying it would not, and has painted the resulting bill as all gain, no pain for Republicans. “There’s not one thing in this bill for Democrats,” he told Fox News. But that’s debatable. Lifting the debt ceiling past the 2024 election is seen as a win for the White House (Republicans had wanted a one-year hike, roughly).
Some of the other items billed as wins for the GOP look like moderate, bipartisan compromises, too. Under the deal, the food stamp program’s work requirements will apply to childless adults up to age 54, up from 49 today. But in exchange, it will expand access for veterans and the homeless. The bill will include some measures to speed up permitting for energy and infrastructure projects, but so far they appear to be relatively narrow process improvements that Democrats can mostly live with that still leave the scope of major environmental laws untouched. On Sunday, McCarthy said he’d pledged to work on a bipartisan permitting bill with Democrats later this year.
At least some high-ranking conservatives have reacted positively to the agreement, suggesting it may not have too much trouble passing. “That seems like a pretty darn good deal to me," Rep. Jim Jordan reportedly told colleagues on the GOP call Saturday. Moderate Republicans also appeared pleased: Nebraska Rep. Don Bacon told Semafor he’d support the bargain, calling it “a responsible agreement.”
That’s not surprising: Republicans are getting a budget deal that, in their view, is a vast improvement over last year’s, and for many that’s clearly enough. The big question now is whether the deal falls so short of conservatives’ expectations that they may challenge McCarthy’s speakership over it.
As of now, the speaker is projecting confidence: At a press conference Sunday, he said 95 percent of his conference is pleased with the bill, and that he was “not at all” worried about losing his job.
Room for Disagreement
At least some progressives are furious at Biden’s concessions. As McCarthy noted, many Democrats had urged Biden not to negotiate at all, and instead take unilateral action to try and avoid a default. By doing so, they hoped to remove the debt ceiling as a weapon once and for all. This deal keeps it in the Republican arsenal for the indefinite future.
“This deal is going to cripple Biden’s presidency because now they know they can gore every sacred cow and Dems will fold. They’ve got us on the ropes,” tweeted Sarah Christopherson, the legislative and policy director at Americans for Tax Fairness. Those reactions might help rally conservative support, too. Christopherson’s dark take on the bill earned a response from Rep. Marjorie Taylor-Greene, who quipped: “Democrats seem happy with Biden’s deal with McCarthy on the debt ceiling.”
Matt Yglesias offers 17 thoughts on the debt ceiling deal, including some praise for Biden’s often maligned messaging approach. “Biden frustrated a lot of his allies on the Hill over the past month by not having more of a communications strategy, but the best insight the president has brought to all his bipartisan legislating is that the less said the better in order to negotiate in private around real demands rather than in public around positions.”
This post was updated to reflect new information after text of the bill was released.