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Deal is Finally Made on U.S. Debt Ceiling

President Joe Biden and Republican House members have finally made a deal regarding the U.S. debt ceiling, after weeks of intense negotiations. Although Speaker McCarthy and the President have reached a deal, this does not mean the deal is set in stone. Lawmakers from both sides of the aisle have to approve this deal, and there have already been Democrat and Republican members of Congress openly disapproving of the deal because they feel it involves unnecessary provisions.

Overview

If the new deal gets approved, the nation’s borrowing cap would be suspended until 2025, meaning that the nation can continue to accrue debt during this time. The deal also puts a cap on spending in non-defense areas. These categories include public education, transportation, and more. A cap would be put on non-defense spending until 2024 and then a spending increase of 1% will take place in this area until 2025.

IRS Funding Cut

 

Part of this deal that has been received with mixed emotions from congress members is reappropriating IRS funds that the agency is receiving under the Inflation Reduction Act. This part of the deal would reappropriate roughly $20 billion to be used on non-defense spending for fiscal years 2024 & 2025. Additionally, an agreement was also made to rescind $1.4 billion from the IRS for this year, as this is the projected amount that the agency planned to spend for non-taxpayer services.

Student Loan Payments Resumed

Another major talking point of this agreement involved the resuming of student loan repayments. Under the deal, all borrowers would be required to resume making payments at the end of summer. Qualifying borrowers are still entitled to the $20,000 in debt relief in the agreement.

Wrap Up

It is safe to say that there are many elements in this agreement that were made that people of Congress on both sides of the aisle either agree or disagree on. With that being said, it is unknown if this deal will be approved or struck down by Congress. Something that is known, however, is that the US is running out of time when it comes to agreeing on a resolution.

 
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