The agreement between Mr. Biden and the Speaker of the US House of Representatives addresses many important budget issues, the most important of which is the provision to prevent the government from defaulting.
Just a few days before the US government fell into default, President Joe Biden and Speaker of the House Kevin McCarthy announced on the evening of May 27 that they had reached an agreement on the public debt ceiling and guaranteed budget for the government in two years. next year.
President Biden hailed it as a "major step forward" that would eliminate the threat of a "catastrophic default" and protect the US economic recovery. The deal will be reviewed by the US House of Representatives and Senate respectively, with a number of key elements agreed upon by the White House and Mr. McCarthy during intense negotiations.
US President Joe Biden (right) and Speaker of the House Kevin McCarthy at the White House on May 22. Image: The Washington Post
Putting aside the debt ceiling problem
The agreement will suspend the limit on the amount of money the US government can borrow until January 1, 1, preventing a possible default on June 2025 if the debt ceiling is not raised.
This has always been a priority for President Biden because he never wanted an economic disaster due to default during his term.
The two-year extension of the debt ceiling means that Congress doesn't have to deal with the issue until after the 2024 presidential election. If President Biden is re-elected and Democrats regain control of the House later. the election, the state of the US on the brink of default will be unlikely, according to observers.
Set a spending limit for two years
The agreement sets a maximum annual government spending level for the next two years, keeping non-defense spending the same in 2024 and increasing it by 1% in 2025.
This means that budgets for domestic programs, besides Social Security and Medicare, will remain unchanged. The agreement also aims to increase grants to improve medical care for veterans.
This was seen as a concession by Republicans, who initially wanted to set a cap on annual government spending over the next 10 years.
Increase claims with benefit programs
The final stumbling block before President Biden and Chairman McCarthy reach an agreement is the dispute over increased employment requirements for beneficiaries of welfare programs, which Republicans want to push but The White House objected.
Under a final agreement reached by both parties, the Supplemental Nutrition Assistance Program was adjusted, forcing healthy adults 54 years of age and younger without dependent children to receive food vouchers only. within certain deadlines if they are unable to meet some specific job requirements.
But the deal would also increase food assistance for the homeless and veterans, a provision seen as a win for the White House.
The agreement sets out additional employment requirements for those receiving Temporary Assistance for Needy Families program benefits, but makes no changes to Medicaid, something President Biden has steadfastly insisted decided he would not support.
Budget reduction for the US Internal Revenue Service
Another concession that Republicans reached was an agreement that would recover $10 billion of the $80 billion in Internal Revenue Service (IRS) budget approved under President Biden's Inflation Reduction Act last year. This act was enacted to give the IRS more capacity to deal with tax evasion by the rich and large corporations.
Increasing the IRS budget has long been the target of Republican congressional attacks. They have always expressed dissatisfaction with the IRS hiring 87.000 more auditors and tax officers, who will increase the investigation of tax evasion.
The $10 billion budget the Biden administration plans to allocate to the IRS is aimed at modernizing an understaffed tax collection agency with the goal of cracking down on property tax fraud.
The US tax deficit has grown significantly, from $441 billion per year between 2011 and 2013 to $584 billion in 2019. Over the next decade, it is estimated that this deficit will reach $7 trillion.
Unused Covid-19 relief money recovered
In response to another call from Republicans, the deal will recover billions of dollars in undisbursed Covid-19 aid funds.
A memo circulated among the Republican leadership in the House of Representatives said the restrictive measures included a $400 million cut from the Centers for Disease Control and Prevention's Global Health Fund.
Opponents of this provision expressed concern that the cuts in funding would affect efforts to prepare for the next pandemic and affect a very important source of money from the ongoing public health system. underfunded. House Democrats say the government still needs money to keep the Strategic National Stockpile stocked with essential medical supplies.
A Democratic source with knowledge of the matter said President Biden's priority for the Covid-19 fund is "protecting public health money, which we can do."
Maintain tax incentives for the rich
President Biden hopes to be able to limit spending cuts through increasing revenue by revoking tax incentives that former president Donald Trump issued in 2017 to the wealthiest Americans and corporations, while sealing tax loopholes exploited by the super-rich.
But the agreement reached with House Speaker McCarthy does not address the issue at all, meaning tax incentives for the rich in America remain in effect.
With the tax system not affected, President Biden is likely to make the call for wealthy Americans to "pay taxes fairly" a focus of his re-election campaign, experts say. .
The White House has also been successful in its efforts to uphold the Inflation Reduction Act and the President's program to remove student loans, which could impact millions of Americans.
Republicans had previously proposed scrapping both laws. The most important change to student loans will be to require borrowers, who have been put on hold in their monthly payments during the pandemic, to start paying back their loans. government.
The fate of the deal remains uncertain, though, as it must be ratified by both houses. Conservatives have opposed the deal, which they say will not be enough to cut federal spending, while some liberals fear it will sacrifice funding for key priorities. Surname.
"I strongly urge both chambers to pass that agreement," President Biden said after announcing the deal he worked so hard to reach with House Speaker McCarthy.
Vu Hoang (Follow Washington Post, USA Today)
