What are the $136 billion cuts in the deal between Speaker Kevin McCarthy and President Joe Biden?
Not enough, to be honest.
First and foremost, the bill suspends the debt limit for two years “for the beginning on the date of the enactment of this Act and ending on January 1, 2025.”
The language means the Treasury Secretary can borrow money he or she needs to pay our bills:
(1) the face amount of obligations issued under chapter 31 of such title and the face amount of obligations whose principal and interest are guaranteed by the United States Government (except guaranteed obligations held by the Secretary of the Treasury) outstanding on January 2, 2025, exceeds
(2) the face amount of such obligations out10 standing on the date of the enactment of this Act.
(c) RESTORING CONGRESSIONAL AUTHORITY OVER THE NATIONAL DEBT.—
(1) EXTENSION LIMITED TO NECESSARY OBLIGATIONS.—An obligation shall not be taken into account under subsection (b)(1) unless the issuance of such obligation was necessary to fund a commitment incurred pursuant to law by the Federal Government that required payment before January 2, 2025.
(2) PROHIBITION ON CREATION OF CASH RE20 SERVE DURING EXTENSION PERIOD.—The Secretary of the Treasury shall not issue obligations during the period specified in subsection (a) for the purpose of increasing the cash balance above normal operating balances in anticipation of the expiration of such period.
Thanks, McCarthy.
The bill cuts back the billions given to the IRS in the Inflation Reduction Act:
Of the unobligated balances of amounts appropriated or otherwise made available for activities of the Internal Revenue Service by paragraphs (1)(A)(ii), (1)(A)(iii), (1)(B), (2), (3), (4), and (5) of section 10301 of Public Law 117–169 (commonly known as ‘‘Inflation Reduction Act of 2022’’) as of the date of the enactment of this Act, $1,389,525,000 are hereby rescinded.
It also repurposes “another $20 billion from the $80 billion” the IRS got in that bill.
The debt bill also changes the requirements one must meet to receive government benefits:
The bill imposes new work requirements for food stamps on adults ages 50 to 54 who don’t have children living in their home. Under current law, those work requirements only apply to people age 18 to 49. The age limit will be phased in over three years, beginning in fiscal year 2023. And it includes a technical change to the T.A.N.F. funding formula that could cause some states to divert dollars from the program.
The bill would also exempt veterans, the homeless and people who were children in foster care from food-stamp work requirements — a move White House officials say will offset the program’s new requirements, and leave roughly the same number of Americans eligible for nutrition assistance moving forward.
Sen. Joe Manchin got a win with permit reforms because the bill “has new measures to get energy projects approved more quickly by creating a lead agency to oversee reviews and require that they are completed in one to two years.”
Another plus is ending “Biden’s freeze on student loan repayments by the end of August and restricts his ability to reinstate such a moratorium.” The bill states:
(a) IN GENERAL.—Sixty days after June 30, 2023, the waivers and modifications described in subsection (c) shall cease to be effective.
(b) PROHIBITION.—Except as expressly authorized by an Act of Congress enacted after the date of enactment of this Act, the Secretary of Education may not use any authority to implement an extension of any executive action or rule specified in subsection (c).
(c) WAIVERS AND MODIFICATIONS DESCRIBED.— The waivers and modifications described in this subsection are the waivers and modifications of statutory and regulatory provisions relating to an extension of the suspension of payments on certain loans and waivers of interest on such loans under section 3513 of the CARES Act (20 U.S.C. 1001 note)—
(1) described by the Department of Education in the Federal Register on October 12, 2022 (87 Fed. Reg. 61513 et seq.); and
(2) most recently extended in the announce12 ment by the Department of Education on November 13 22, 2022.
DONATE
Donations tax deductible
to the full extent allowed by law.
Comments
136 Billion?
That’s chump change. If we’re not reducing baseline spending by Trillions, it’s not a cut.
By the deranged thinking of the corrupt assholes in Swampington, a simple decrease in the protected rate of increase is considered a cut, even if you still end up spending more.
The Twitter “community fact checks” about McCarthy’s “victory” have been savage.
Rearranging the deck chairs on the Titanic…
A good summary of the deal as of this moment. This is only a debt ceiling debate. The full budget war comes later this year.
https://www.powerlineblog.com/archives/2023/05/about-the-debt-ceiling-deal.php
Real Government Spending will go up under this bill.
Not exactly a great deal here. McCarthy doesn’t have a strong hand here but IMO could have held out for more meaningful work requirements to receive any Fed govt assistance. The public overwhelmingly supports that; nearly 2/3 of all voters.
Interest payments on federal debt are rising due to rise in interest rates soon our now $33 trillion debt. For comparison in 2008 it was roughly $10 trillion so in 15 years we managed to add on $23 trillion. In a few years debt service will exceed defense spending.
Let’s see if the far left Democrats are sold on this
They aren’t and they won’t be.
Have we forgotten that it was Mitch McConnell who joined the Democrats to pass their omnibus spending bill before the Republicans took control of the House in January?
If people are looking for a Republican to blame for the uncontrolled current spending McCarthy isn’t the guy to blame.
McConnell is the GOP’s most corrupt and dangerous link to the uniparty’s fiscal responsibility.
McCarthy is a big improvement over Paul Ryan, but he needs to do a stronger job of leveraging the power he holds as Speaker of the House.
The question I have to ask myself is whether I could do a better job than McCarthy. I am not a politician so I will have to say I have no idea. Armchair quarterbacks need to get out in the field!
I can’t play the violin either, but I am fully capable of determining when the violin player sucks.
Lo and behold Janet Yellen has found a few more days until debt dooms day. It is her turn to manage the clock on this debt theater. I’m guessing the House passes the deal by 1 vote and goes to the Senate to be cut to pieces and die. The WH will say, well we tried. Days go by and the media takes over and hits Rs hourly on the head with ‘responsible’ debt ceiling increase as a clean bill which the WH will take as their non negotiable position. End result, clean debt limit bill that passes both house.
Maybe, certainly that would be strait out of the d/prog playbook and legacy media would parrot that. On the other hand, once the X day is breached the problem is on Biden and Yellen. They can prioritize the payment of interest to bondholders then Social Security and Medicare then VA, then DoD, then CPB and FAA and Federal Prisons.
Fund those and the Nation doesn’t fall apart. The HoR could always say eff it we passed a bill and the Senate can get on board along with Biden or to he’ll with it. Then point out the ability of the Treasury Sec and Biden to use normal weekly tax receipts to prioritize payments. Once we go past X day the blame comes onto the GoP anyway so may as well make it worthwhile.
Only in DC could this abomination be called winning. We are in so far over our heads and now we are going to add 4 TRILLION more to it? From what I have been able to see of the deal, Biden didn’t give up very much. Also, the DNC is telling the members that “We lost but vote for it anyway”, which means that they are delighted with the results. This is the old false flag scheme that the Rs should recognize immediately and reject it.
The single greatest forcing of government deficits and progressive prices is medical pricing, not cost, sustained through single/central/monopolistic solutions of Medicare, Medicaid, and Obamacares.
I like how the deal conveniently expires during the Lame Duck session on Congress (and hopefully the Presidency) after the 24 election.
This is a JOKE. McCarthy was clearly desperate for any scraps they were willing to throw so he could call it a win and suspend the debt ceiling for TWO FREAKING YEARS so the RINOs wouldn’t have to talk about it during the next election.
The ‘cuts’ are a JOKE. OH WHOA THEY CUT $1.3 BILLION FROM THE IRS!!! NOW THEY ONLY GET $78.7 BILLION EXTRA!!! Oh but they’re ‘repurposing’ some of it.
Stop repurposing and start cutting!!!!
This is a joke and anybody that has the slightest care about the governments absolutely LUNATIC spending binge should feel insulted to call this a ‘win’.
They have basically given the government a bank check for the next 18 months or so. Think of all the billions that will go to Ukraine, how much pork spending bill be in bills during the campaign season of 2024.
Claiming the new work requirement rules as a major victory is a joke, extending work requirements an additional four years is minimal in the grand scheme of things.
They let the government bloat continue and appear to have done nothing to scale back any of that expansion.
I had reservations about McCarthy’s leadership in at crucial moments and he failed as did the entire team that got played by Biden’s and Schumer’s team.
He didn’t get played. This is what he wants.
Absolutely. McCarthy was clearly ‘negotiating’ from a position of ‘give me some table scraps that I can possibly spin as a win to these jackass conservatives’.
He held ALL the cards. Biden and his moronic NO NEGOTIATION was taking it on the chin in every poll by a wide margin. McCarthy had already passed a bill. He had ALL the leverage and he gave it away for absolutely nothing.
McCarthy’s laughable spin on this seems to be, ‘hey they were demanding all these big taxes and I refused!’ Oh wow, so you only gave the Democrats 95% of what they wanted. How ‘conservative’.
The basic problem is that the “debt ceiling” is no such thing. It does not limit the debts the government can run up with any merchant or subcontractor willing to sell to the government in a “buy now, pay later” deal. The debt ceiling only limits the ability to get cash loans to pay off those invoices.
In private business, most business-business transactions are “buy now, pay later”, but only 30 days later: the seller sends an invoice along with the delivery, and the buyer has 30 days to pay. The seller might take the pending payments (“accounts receivable”) to the bank and borrow against them to get money to keep their business going. The bank does not lend the full value of accounts receivable, but discounts them with a deduction in advance for the interest on the loan, plus a percentage for the risk that the business will go under owing money. When the customer pays on time, the vendor pays the bank the loan plus interest, and is only out the interest.
But with the federal government, contractors often wait six months for payment. They can get loans to get most of the money quickly. The bank probably figures loans against account receivables from the federal government are zero risk in the long run, but they have to discount for several months of interest instead of just one. That’s another reason prices go up when the customer is government.
I think that at this point, I’d be OK with the debt ceiling NOT being raised, vendors not getting paid until tax receipts catch up with everything already bought on credit, and the federal government’s credit rating in this context being trashed. The end result is government is forced to get a little smaller, and all future government purchasing going through the hoops a business with a crap credit rating has to go through – COD (Cash On Delivery), pay in advance, or pay with a debit card, but limited to as much as has been deposited in the account before ordering.
Don’t quote Section 4 of the 14th Amendment “The validity of the public debt of the United States … shall not be questioned” in the context of the debt ceiling. If taking six months to pay a 30 day invoice doesn’t violate this – and the federal government does it often – neither will taking a couple of years or never paying the invoice.
The debts are valid no question about it. Of course the creditors in a bankruptcy proceeding have valid debt claims as well.
As usual there aren’t any actual “cuts”. A cut would mean actually reducing the amount of money available/budgets (lol, yea I know) to the agencies. You know actually reducing current spending.
That is not “cut” means in DC. A “Cut” is just knocking a couple of billion off here and there on some fake budgets.
Here is an idea for a beginning cut the Government’s spending by 10% of its current level.
Or even a better idea. Everytime we hear about a “Government Shutdown” once you get past all the lies from the left about SS Checks not getting paid, you find out that the “lay off” for non-essential employes still leave 83% of the Government Functioning. So start by cutting “non-essential” employees and save that 17%. Not to mention those Non-Essentials that were laid off usually get their pay for that time reimbursed after the “shutdown” is over.
Ok, I will get off my soapbox now.
Peace, Love, and Happiness to all.
I just can’t help pointing out that the interest on the debt is roughly $65 Billion a month and revenues are about $360 Billion. My rusty public high school math seems to indicate one is higher than the other so there is no Debt Limit Day Bombshell. If Brandon thinks billions for solar panels and millions for the WHO is more important than paying our debt that’s his choice. I knew the GOP under McCarthy was just business as usual and I was right for a change
These aren’t cuts anyway. They’re reductions in planned spending increases.