Debt Ceiling Deal Would Protect Biden's Agenda, Avoid Costly Campaign Fight

The budget bill the House passed Wednesday would prevent a default and delay the next battle over the debt ceiling until after the 2024 election, giving President Joe Biden breathing room as he seeks a second term.

The bill faces a bumpy road to approval as the action shifts to the Senate, which is expected to take up the legislation as early as Thursday, and Biden still risks angering climate activists who oppose some energy provisions in the deal. But it would preserve most of the president's domestic policy programs, while protecting the economy from spiraling into a recession.

"With this budget agreement, the president [would] protect the economic gains" made under his watch, said Mayra Macías, the interim executive director of Building Back Together, a pro-Biden advocacy group.

But the political upside of the deal struck by Biden and House Speaker Kevin McCarthy is far murkier for rank-and-file Democrats and Republicans.

If the legislation passes both chambers and is signed into law by the president by June 5—the date when the Treasury Department has said the federal government will run out of money to pay its bills—both parties will claim a political victory.

The bill that passed the House protects "key priorities and accomplishments" from his first two years in office, Biden said in a statement Wednesday. But he also acknowledged the bill didn't include everything either party hoped to achieve in the debt ceiling standoff that has consumed Washington for the past several weeks.

"Neither side got everything it wanted," Biden said. "That's the responsibility of governing."

The deal bears all the hallmarks of other bipartisan agreements in the Biden era. At its core, the proposal is a centrist compromise that forces both parties to make concessions, and will likely leave no one fully satisfied in the end.

The bill would suspend the nation's $31.4 trillion borrowing cap until January 1, 2025. It would keep non-defense discretionary spending largely flat for fiscal year 2024, and increase it by 1% the following year.

The caps on discretionary spending would cut the federal deficit by approximately $1.5 trillion over the next decade, according to a projection by the Congressional Budget Office (CBO).

The deal includes some Republican priorities. It would rescind $28 billion in unspent COVID-19 funding, and restart student loan payments that were suspended at the start of the pandemic.

The legislation would also repurpose some of the funding for the Internal Revenue Service that was included in the Inflation Reduction Act, the law Democrats passed last year on a party-line vote over the objections of House and Senate Republicans.

But the agreement would not produce the deep cuts in federal spending that many conservative lawmakers had hoped for. Conservatives also pushed for stringent work requirements for adults who receive government benefits through the Supplemental Nutrition Assistance Program and the Temporary Assistance for Needy Families Program.

The deal imposes stricter work requirements for some adults who receive food stamps and aid through the programs. But it would exempt veterans, former foster care children and homeless people from the work requirements.

The CBO projected that spending on food aid would increase because of the exemptions. The analysis, released Tuesday, infuriated many Republicans and threatened to derail the final vote in the House.

Parts of the 99-page bill are also deeply unpopular with some Democrats.

Progressive lawmakers and outside groups were especially incensed about a permitting reform provision in the legislation that would fast-track energy projects, including a natural gas pipeline championed by Democratic Senator Joe Manchin of West Virginia.

Although the final deal didn't roll back Biden's main climate policies, something Republicans pushed for at the outset of negotiations, Ariel Moger, the government and political affairs director at Friends of the Earth, called the energy measures in the legislation a "major setback" in a statement sent to Newsweek.

"This deal paves the way for Big Oil to more easily build harmful energy projects," Moger said, "and does nothing to actually speed up our transition to just renewable energy."

Senior White House officials spent recent days selling the debt ceiling deal to skeptical Democrats, following a strategy used in the past to bring Democrats on board with bipartisan legislation on a major infrastructure package, gun control reforms, and other issues.

The outreach from Biden and his negotiating team included more than 120 calls to members of Congress and eight briefings for the House Democratic caucus, White House press secretary Karine Jean-Pierre said Wednesday.

In the end, the House bill passed by a vote of 314 to 117, with support from 165 Democrats and 149 Republicans. It was opposed by 71 Republicans and 46 Democrats, in a significant show of disapproval from far right and left lawmakers in the House.

McCarthy dismissed the defections from his party and touted the deal during a press conference Wednesday after the vote.

"We were never going to get everybody," he said.

Biden echoed McCarthy as he urged the Senate to pass the House bill as quickly as possible.

"I have been clear that the only path forward is a bipartisan compromise that can earn the support of both parties," Biden said. "This agreement meets that test."