Debt Limit Agreement Breakdown
House Speaker Kevin McCarthy and President Joe Biden brokered a two-year agreement to suspend the debt ceiling and got quick congressional approval before the federal government runs out of money.
The deal would suspend the debt limit until Jan. 1, 2025, at which point the Treasury Department would reset the limit at whatever amount the government’s spending would be then. The deal also would come just days before June 5, the date when the federal government wouldn’t be able to pay its bills without an increase in or suspension of the nation’s borrowing cap, Treasury has said.
The House passed the bill, called the Fiscal Responsibility Act, by a vote of 314 to 117 on May 31, and the Senate approved it a day later 63 to 36. The president is expected to sign it.
Update, June 4: The president signed the bill on June 3.
We’ll explain the main provisions of the bill that would cut, and increase, federal spending.
The legislation is a compromise between Republicans, larger spending reductions, and the White House, which wanted no spending cuts in a debt limit bill. House Republicans had passed legislation in late April that would have reduced projected budget deficits by $4.8 trillion over 11 years, . The bipartisan deal would reduce deficits by $1.5 trillion over 11 years, but that also assumes that Congress follows through on nonbinding spending caps after 2025, CBO .
