Congress has passed the debt ceiling package, just days before the Treasury Department would have run out of sufficient funds to pay all of the nation’s obligations on time and in full.
After months of stalemate and weeks of tense negotiations, the deal came together over the Memorial Day holiday weekend. But its passage in Congress was not guaranteed since it contained provisions that lawmakers on each side of the aisle didn’t support.
The bill text was released on Sunday evening, and leaders of both parties spent days securing support for the legislation by casting it in ways favorable to their side.
With Congress’ approval, it now moves to President Joe Biden to be signed into law.
Here’s what we know about the package:
Addresses the debt ceiling
The legislation suspends the nation’s $31.4 trillion debt limit through January 1, 2025. This removes it as a potential issue in the 2024 presidential election.
Caps non-defense spending
Non-defense spending will remain relatively flat in fiscal 2024 and increase by 1% in fiscal 2025, after certain adjustments to appropriations are made, according to a White House official. After fiscal 2025, there are no budget caps, just non-enforceable appropriations targets.
According to a House GOP fact sheet, non-defense discretionary spending will be rolled back to fiscal 2022 levels and topline federal spending will be limited to 1% annual growth for the next six years.
Non-defense discretionary spending for fiscal 2024 will be capped at about $704 billion, of which $121 billion will be for veterans’ medical care and $583 billion will be for other areas, according to a source familiar with the legislation.
But the adjustments will bring the resources available for spending outside of veterans’ medical care to $637 billion for the coming fiscal year, compared to $638 billion for the current one.
Under the legislation, $11 billion in rescinded unobligated Covid-19 relief funds and $10 billion in money shifted from the Internal Revenue Service will be used to beef up non-defense discretionary spending. Also, $10 billion in funds repurposed from mandatory programs and $23 billion that’s designated as emergency funding will be shifted.
Some $886 billion will be spent on defense, according to the bill text.
The debt ceiling bill that House Republicans passed in April would have returned discretionary spending to fiscal 2022 levels and then limited the growth in spending to 1% for a decade. Defense spending would have been protected.
Protects veterans’ medical care
The legislation will maintain full funding for veterans’ health care and will increase support for the PACT Act’s toxic exposure fund by nearly $15 billion for fiscal year 2024, according to a White House source.
The House GOP fact sheet says veterans’ medical care will be fully funded.
Expands work requirements
The package calls for temporarily broadening of work requirements for certain adults receiving food stamps.
Currently, childless, able-bodied adults ages 18 to 49 are only able to get food stamps for three months out of every three years unless they are employed at least 20 hours a week or meet other criteria. The legislation will increase the upper limit of the mandate to age 55 in phases, according to the bill text.
However, the package will also expand exemptions for veterans, people who are homeless and former foster youth in the Supplemental Nutrition Assistance Program, or SNAP, as food stamps are formally known.
And all the changes will end in 2030. The provisions are projected to boost enrollment by 78,000 people in an average month when fully implemented, according to a Congressional Budget Office analysis of the bill.
The package will also tighten the current work requirements in the Temporary Assistance for Needy Families program, primarily by adjusting the work participation rate credits that states can receive for reducing their caseloads.
Work requirements will not be introduced in Medicaid, which House Republicans had called for in their debt ceiling bill.
Claws back some Covid-19 relief funds
The legislation will rescind roughly $28 billion in unobligated funds from the Covid-19 relief packages that Congress passed to respond to the pandemic, according to the House GOP.
It will retain $5 billion in funding to accelerate the development of Covid-19 vaccines and treatments, and funding for vaccines and treatments for the uninsured, according to a White House source. It will also keep money for housing assistance, the Indian Health Service and other measures.
Congress approved roughly $4.6 trillion in Covid-19 relief funds since the pandemic began in early 2020.
Cuts Internal Revenue Service funding
House Republicans have been determined to jettison the roughly $80 billion in IRS funding over 10 years contained in the Inflation Reduction Act that Democrats passed last year. The GOP lawmakers argue that the money will be used to hire an army of new agents to audit Americans, but the agency says it will also be used to support operations, modernize customer service technology and assist taxpayers.
The package will repurpose $10 billion from fiscal 2024 and another $10 billion from fiscal 2025 appropriations to be used in non-defense areas, according to the White House source.
This provision does not appear in the text of the bill, but another source familiar with the deal said both sides have agreed to it.
Separately, the legislation will also rescind $1.4 billion in IRS funding from the act, which the GOP describes as the full amount of funds included in the agency’s fiscal 2023 spending plan for non-taxpayer services.
The moves mean that the IRS will use up the boost in funding and need to request additional money from Congress sooner than a decade, according to the White House official.
Restarts student loan repayments
Under the package, borrowers will have to begin paying back their student loans at the end of the summer, as the Biden administration has already announced, according to a third source familiar with the debt ceiling talks. The pause has been in effect since the Covid-19 pandemic began.
The legislation will prohibit the administration from extending it again.
Also, the package will maintain Biden’s plan to provide up to $20,000 in debt relief for qualifying borrowers, the source said. The measure is currently before the Supreme Court, which is expected to rule on it in coming weeks.
The legislation will also continue Biden’s income-driven repayment plan, according to the White House source.
The House and Senate have passed a bill to block the forgiveness program, as well as end the pandemic-related pause on federal student loan payment. Biden has pledged to veto it.
Maintains climate and clean energy measures
The legislation will not make any changes to the Inflation Reduction Act’s climate and clean energy provisions, according to the White House talking points.
House Republicans had sought to repeal the law’s clean energy tax credits and subsidies.
The package also includes new measures in the National Environmental Policy Act aimed at boosting the coordination, predictability and certainty associated with federal agency decision making, according to the White House source.
It will designate a single lead agency, charged with developing a single environmental review document, and also will require agencies to complete environmental reviews in one year, or two years for the most environmentally complex projects.
Expedites pipeline in West Virginia
The package will also speed the creation of the Mountain Valley Pipeline, a natural gas pipeline in West Virginia.
This story has been updated to reflect the legislation’s passage in the Senate.
CNN’s Priscilla Alvarez, Alayna Treene, Kevin Liptak and Lauren Fox contributed to this report.
The House on Wednesday overwhelmingly passed legislation negotiated by President Biden and Speaker Kevin McCarthy to suspend the debt ceiling and set federal spending limits, as a broad bipartisan coalition lined up to cast a critical vote to pull the nation back from the brink of economic catastrophe.Did Congress suspend the debt ceiling? ›
The House passed a bill to suspend the debt ceiling on Wednesday, clearing a major legislative hurdle with just days left before the US is expected to default. The final House vote was 314 to 117, with 149 Republicans and 165 Democrats supporting the measure.Did Senate pass debt ceiling? ›
The U.S. Senate passed a debt ceiling bill, addressing the issue just before the country would have defaulted on its debts. Senators voted 63-36 to pass the bill. Both senators Joe Manchin, a Democrat, and Shelley Moore Capito, a Republican, voted yes. The bill now goes to President Biden, who has said he will sign it.What is included in the debt ceiling bill? ›
The legislation will increase the upper limit of the mandate to age 55 in phases, according to the bill text. However, the package will also expand exemptions for veterans, people who are homeless and former foster youth in the Supplemental Nutrition Assistance Program, or SNAP, as food stamps are formally known.Who does the US owe money to? ›
Total national debt
First, the debt held by the public stands at more than $24.64 trillion. This represents debt securities, like Treasury bonds and notes, bought by banks, insurance companies, state and local governments, foreign governments and private investors.
The $32 trillion gross federal debt includes debt held by the public as well as debt held by federal trust funds and other government accounts. In very basic terms, this can be thought of as debt that the government owes to others plus debt that it owes to itself.How many votes needed for debt ceiling? ›
White House aides privately estimate they may need to deliver as many as 100 Democratic votes to ensure an eventual debt limit deal can pass the narrowly divided House, two people familiar with the matter told POLITICO.What is the debt ceiling for student debt relief? ›
The one-time student loan forgiveness program promises up to $20,000 of debt relief for low- and middle-income borrowers if the Supreme Court allows it to move forward. While House Republicans have previously voted to block the program – a bill Biden has pledged to veto – the debt ceiling deal leaves it alone.What is the debt deal spending cut? ›
The debt-limit agreement imposes an automatic 1 percent cut on all spending — including on military and veterans programs, which were exempted from the caps in the compromise bill — unless all dozen bills are passed and signed into law by the end of the calendar year.Do I get student loan forgiveness? ›
Who qualifies for student loan forgiveness? To be eligible for forgiveness, you must have federal student loans and earn less than $125,000 annually (or $250,000 per household). Borrowers who meet that criteria can get up to $10,000 in debt cancellation.
The debt ceiling is the maximum amount of money that the United States can borrow cumulatively by issuing bonds. The debt ceiling was created under the Second Liberty Bond Act of 1917 and is also known as the debt limit or statutory debt limit.What is the Senate voting on? ›
The Senate votes on bills, resolutions, motions, amendments, nominations, and treaties in a variety of ways.How much debt is the U.S. in 2023? ›
At the end of FY 2022 the federal debt was $30.84 trillion. At the end of FY 2023 federal debt is “guesstimated” to amount to $32.69 trillion. Thus far, on 2023-06-15, the federal debt is $32.04 trillion. See Coronavirus Update page.What bills are considered in debt to income ratio? ›
- Monthly mortgage payments (or rent)
- Monthly expense for real estate taxes.
- Monthly expense for home owner's insurance.
- Monthly car payments.
- Monthly student loan payments.
- Minimum monthly credit card payments.
- Monthly time share payments.
The deal struck by President Biden and House GOP negotiators over the weekend would raise the age to 54, up from 49, for able-bodied, low-income adults without dependents who would be required to work at least 80 hours a month to receive food aid.Could the US ever get out of debt? ›
Eliminating the U.S. government's debt is a Herculean task that could take decades. In addition to obvious steps, such as hiking taxes and slashing spending, the government could take a number of other approaches, some of them unorthodox and even controversial. Below are some of these options.Which country has no debt? ›
|Characteristic||National debt in relation to GDP|
|Hong Kong SAR||4.26%|
Therefore, China's national debt has surged almost three times that of the United States in the past 12 months. In the third spot, Japan has a national debt of $13.36 trillion, indicating a drop of $1.49 trillion YoY.How much does the US owe China? ›
|Rank||Country||U.S. Treasury Holdings|
|3||🇬🇧 United Kingdom||$655B|
Flashpoints that greatly contributed to the debt over the past 50 years include the wars in Iraq and Afghanistan, the 2008 financial crisis and the 2020 COVID-19 pandemic -- the latter two prompting sweeping stimulus measures from Congress that cost trillions of dollars.
Since the government almost always spends more than it takes in via taxes and other revenue, the national debt continues to rise. To finance federal budget deficits, the U.S. government issues government bonds, known as Treasuries.How many Republicans are in the House 2023? ›
|Leader since||January 3, 2019||January 3, 2023|
|Leader's seat||California 20th||New York 8th|
|Last election||222 seats, 50.6%||213 seats, 47.8%|
There are currently 435 voting representatives. Five delegates and one resident commissioner serve as non-voting members of the House, although they can vote in committee.Who holds student debt by income level? ›
Student Loan Debt by Household Income
Households with income in the 90th percentile held 11% of all student loan debt prior to 2020. Households in the highest income quartile (76th percentile and higher) owe 34% of student loan debt. Households with income in the 51st to 75th percentile hold 29% of student loan debt.
Scholarships, grants, and work study are the three main financial aid types that don't need to be paid back.What does the new debt ceiling deal mean? ›
Lifting the debt ceiling.
The deal reached by President Biden and Speaker Kevin McCarthy will suspend the nation's debt limit until January 2025. This will allow the government to keep borrowing money so it can pay its bills on time.
To provide more flexibility to finance the United States' involvement in World War I, Congress modified the method by which it authorized debt in the Second Liberty Bond Act of 1917. Under this Act, Congress established an aggregate limit, or "ceiling," on the total amount of new bonds that could be issued.Is U.S. deficit the same as debt? ›
The debt is the total amount of money the U.S. government owes. It represents the accumulation of past deficits, minus surpluses. Debt is like the balance on your credit card statement, which shows the total amount you have accrued over time.What student loans are not eligible for forgiveness? ›
What student loans are not eligible for forgiveness? Private student loans, by definition, are private and are not eligible to be forgiven. These are loans the borrower owes to student loan providers and not the federal government. Mr.
Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years (if all loans were taken out for undergraduate study) or 25 years (if any loans were taken out for graduate or professional study).Who qualifies for the student loan forgiveness program? ›
The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.Who owns the most U.S. debt? ›
According to usafacts.org, as of January 2023, Japan owned $1.1 trillion in US Treasuries, making it the largest foreign holder of the national debt. The second-largest holder is China, which owned $859 billion of US debt.What happens if the US reaches the debt ceiling? ›
Potential repercussions of reaching the ceiling include a downgrade by credit rating agencies, increased borrowing costs for businesses and homeowners alike, and a dropoff in consumer confidence that could shock the United States' financial market and tip its economy—and the world's—into immediate recession.What happens if the US defaults on debt? ›
So if the U.S. cannot pay its creditors, interest rates on U.S. debt would go up, creating a cascade of higher interest rates. So mortgage rates, credit card rates, car loan rates. All would become more expensive. Finally, there is a real concern about the economy — that a default could spark a recession.What is the definition of a filibuster? ›
The Senate tradition of unlimited debate has allowed for the use of the filibuster, a loosely defined term for action designed to prolong debate and delay or prevent a vote on a bill, resolution, amendment, or other debatable question.What is the Show Up Act 2023? ›
May 11, 2023. WASHINGTON, D.C. – U.S. Senator Marsha Blackburn (R-Tenn.) today introduced the Stopping Home Office Work's Unproductive Problems (SHOW UP) Act, which would require all executive agencies to return to remote work policies practiced prior to the COVID-19 public health emergency.What is a yes or no vote called? ›
A referendum usually offers the electorate a straight choice between accepting or rejecting a proposal. However some referendums give voters multiple choices, and some use transferable voting.Which government has the most debt? ›
According to data published by London-based investment fintech Invezz, Japan, Greece, Italy, Portugal, and the US are the top five nations with the highest level of government debt.Which country is owed the most money? ›
The United States has the world's highest national debt with $30.1 trillion owed to creditors as of the first quarter of 2023.
The debt limit caps the total amount of allowable outstanding U.S. federal debt. The U.S. hit that limit—$31.4 trillion—on January 19, 2023, but the Department of the Treasury has been undertaking a set of “extraordinary measures” so that the debt limit does not yet bind.Does food count as a monthly debt? ›
The monthly debt payments included in your back-end DTI calculation typically include your proposed monthly mortgage payment, credit card debt, student loans, car loans, and alimony or child support. Don't include non-debt expenses like utilities, insurance or food.Does a mortgage count as debt? ›
Is a mortgage considered debt? A mortgage is a type of secured debt because the real estate you're financing is used as collateral against the loan. Non-mortgage debt is any other type of debt that's not secured by real estate, such as personal loans, student loans, auto loans and credit cards.Is car insurance considered debt? ›
What is not included in my debt-to-income ratio? Your debt-to-income ratio does not factor in your monthly rent payments, any medical debt that you might owe, your cable bill, your cell phone bill, utilities, car insurance or health insurance.Who helped the U.S. get out of debt? ›
Alexander Hamilton rallied for the government to assume some debt and help meet its expenses. He pushed the framers of the new Constitution to establish measures to provide the assurance that the debt would be paid, and thus increase confidence in the growing government.How does the debt ceiling deal affect food stamps? ›
The debt ceiling agreement would put almost 750,000 older adults aged 50-54 at risk of losing food assistance through an expansion of the existing, failed SNAP work-reporting requirement.Did the Senate pass the debt ceiling? ›
The U.S. Senate passed a debt ceiling bill, addressing the issue just before the country would have defaulted on its debts. Senators voted 63-36 to pass the bill. Both senators Joe Manchin, a Democrat, and Shelley Moore Capito, a Republican, voted yes. The bill now goes to President Biden, who has said he will sign it.When did Congress raise the debt limit? ›
The debt ceiling was raised 74 times from March 1962 to May 2011, including 18 times under Ronald Reagan, eight times under Bill Clinton, and seven times under George W. Bush. Congress has raised the debt ceiling 14 times from 2001 to 2016.How to see how your representative voted? ›
To access votes using Congress.gov search for a bill and click on the "Actions" tab. All House and Senate roll call votes will be listed with links to the House and Senate's web pages. The Congressional Record is the official source of information on recorded floor votes.How many Democrats are in the Senate? ›
The Constitution prescribes that the Senate be composed of two senators from each State (therefore, the Senate currently has 100 Members) and that a senator must be at least thirty years of age, have been a citizen of the United States for nine years, and, when elected, be a resident of the State from which he or she ...Has the US government ever been debt free? ›
1837: Andrew Jackson
(In 1835, the $17.9 million budget surplus was greater than the total government expenses for that year.) By January of 1835, for the first and only time, all of the government's interest-bearing debt was paid off.
Your voter registration and some other voting documents, like a mail ballot application, are public records. No one however, not even elections officials, can find out who you voted for once your ballot is accepted. No one should be turned away at the polls.How many Democrats are in the House of Representatives? ›
|United States House of Representatives|
|Seats||435 voting members 6 non-voting members 218 for a majority|
|Political groups||Majority (222) Republican (222) Minority (212) Democratic (212) Vacant (1) Vacant (1)|
|Length of term||2 years|
Between 1789 and 2020, 152 have served in the House of Representatives, 9 have served in the Senate, and 1 has served in both chambers. Voting members have totaled 156, with 6 serving as delegates. Party membership has been, 131 Democrats, and 31 Republicans.Who is the oldest senator in the United States? ›
She also chaired the International Narcotics Control Caucus from 2009 to 2015 and was the ranking member of the Senate Judiciary Committee from 2017 to 2021, during the Trump administration. At 89, Feinstein is the oldest sitting U.S. senator and member of Congress.Who has control of the House? ›
Rep. Kevin McCarthy, R-CA, is the speaker of the House. He is the 55th person to serve as speaker of the House. It took 15 rounds of voting to elect McCarthy into the position, the first time in more than a century that the process of electing a speaker took more than one ballot.How long can a senator serve? ›
The Senate has a membership of 40 Senators elected for 4-year terms, 20 to begin every 2 years. During his or her lifetime a person may serve no more than 12 years in the Senate, Assembly, or both, in any combination of terms.Is the speaker of the house equal to the President? ›
The presiding officer of the chamber is the Speaker of the House, elected by the Representatives. He or she is third in the line of succession to the Presidency.How old must a representative be to be elected? ›
Representatives must be 25 years old and must have been U.S. citizens for at least 7 years.