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Debt ceiling deal cuts domestic spending about 5%

Apparently a debt ceiling deal has been reached. There's surprisingly little to it, chiefly a freezing of domestic spending in next year's budget. At a guess, this means cuts of maybe 3-4% after you adjust for inflation. In the following year, spending would increase 1%, which probably represents further cuts of 1-2% after inflation. So this comes to total cutbacks over two years of around 5% or so. There are no reported changes to Social Security, Medicare, or Medicaid.

That's a substantial slash to domestic programs. In addition, the deal includes some work requirements for food stamps and some mild permitting reforms to allow federal energy projects to pass environmental review more quickly.

And that's about it. Now it's just a matter of seeing if it can pass.

32 thoughts on “Debt ceiling deal cuts domestic spending about 5%

  1. MattBallAZ

    This is what the Rs would have gotten by either shutting down the government or passing continuing resolutions. Once Rs won the House, this was inevitable.
    Voting matters.

  2. different_name

    I do hope everyone sends their thanks for all this to the Right Hrbl. Sen. Joey Manchin III, without whom this would not have happened.

    And I have to disagree with our host on one thing -

    There's surprisingly little to it

    aside from the dogs that aren't barking. Instead of any number of useful things that government could be doing, the only "productive" thing here is that the Freedom Caucus nihilists are practicing and learning the contours of what they can currently get away with.

    1. Austin

      Don’t forget Sinema. She was too busy chasing after butterflies or being all mavericky to support a debt ceiling increase in December too.

  3. WanderinMCD

    I sometimes wish Biden had done an interview where he said something like "If Congress doesn't send me a debt ceiling bill that includes money for a Green New Deal and repeals the Trump tax cuts, I'm vetoing it."

  4. Jasper_in_Boston

    Not a catastrophic deal. But fairly bad nonetheless. But make no mistake: this fairly bad deal came into being solely because Republicans threatened to firebomb the US economy. Such patriots, those Republicans.

    Sooner or later the constitutional non-tenability of the debt ceiling has to be asserted. Even doing away with it by law next time Democrats have a trifecta might not be enough, as Republicans could repeal the law next time they have a trifecta.

    1. kenalovell

      Democrats will be nuts if they don't add a rider to all their future spending bills to the effect that the debt limit is thereby raised by whatever amount proves necessary to fund the spending. If Republicans choose not to do likewise, that's on them.

      1. HokieAnnie

        That's how it used to be handled when the Democrats were in control, it was called the Gephardt Rule. But then the GOP took over in 2011 they began to use the ceiling as a hostage until Trump got elected.

  5. kenalovell

    If the deal is as reported, Democrats should welcome it. Biden's key objectives were always (1) to ensure default couldn't be used as a threat again next year, and (2) to wrap the pending budget framework into the negotiations, so he could avoid the prospect of Republicans saying "well now we've got your concessions for raising the debt limit, let's hear what you're offering to stop us shutting down the government". In other words he's taken the threat of financial chaos and associated recession off the table for the remainder of this term. Frankly I'm astonished McCarthy has gone along with it. The fury of the MAGAts will be incendiary.

    People declaring he should not have made any concessions are living in a fantasy world where elections don't have consequences. Spending bills originate in the House, where Republicans have the majority. It was always a pipe dream to think Democrats could stop them achieving any of their cherished objectives. Biden's team seems to have played an excellent hand to make sure they achieved so few of them.

    1. Anandakos

      Yes, I agree; Biden cleaned their clocks. The additional "work requirements", from what I can tell at this point, are not more onerous; they just add five years to a person's time that they are enforced. That really doesn't seem like the end of the world.

  6. D_Ohrk_E1

    Better than 2% across the board (except Medicaid/Medicare/VA/Defense) cuts from 2023 levels, which is what I was expecting.

  7. Keith B

    Assuming this deal passes, it makes the Freedom Caucus look very weak. It's clearly not at all what they wanted. The only way they can save face is to invoke the conditions that were their price for voting for McCarthy for Speaker and call for a vote to remove him. But McCarthy must know this, so he's either willing to sacrifice himself for the sake of a deal (very uncharacteristic) or he's confident he can survive a vote.

    If the Freedom Caucus doesn't try to remove McCarthy, they're weak. If they try and fail, they're weak. If they try and succeed, they throw their caucus back into the confusion it was in at the beginning of the term. In short, this deal, if it passes, is not good news for far right wing Republicans.

    1. Salamander

      If the "Freedumb!" folks are sufficiently annoyed, they are capable of removing McCarthy the moment he brings this "deal" to the floor.

      Then we would be stuck with a totally nonfunctional Congress -- both houses of it -- that's unable to pass ANY laws, much less budgets or debt ceiling matters, until a new Speaker is chosen. Who, by definition, would have to reject McQ's compromise. It would also take a long time.

      We aren't out of the woods yet.

      1. Keith B

        I expect that both Biden and McCarthy know this and are prepared to deal with it. It's doubtful that McCarthy would have agreed to the deal if he thought it would be the end of his Speakership. Chances are there was a lot of other deal-making behind the scenes that we don't know about. But we'll have to wait and see.

  8. jdubs

    Remember the reason that Americans cant have nice things. Its not because Republicans are universally opposed (although they are), its because a fair number of Democrats are too.

    The narrative trying to paint this as not only acceptable but a victory!! is a bit comical....but par for the course for the Democratic turd sandwich slingers.

  9. S1AMER

    Yeah, it could have been worse, but at least the numbers of our fellow Americans who will be harmed if this goes through is less than it might have been, so there's that ...

    But -- and here's the thing -- Republicans will be back with the same extreme demands come September, at that time threatening to shut down the whole damned government or they'll kill all the same hostages they were threatening to kill now.

    1. golack

      Not sure. This is not just a debt ceiling bill, but also a budget bill. This should keep the gov't running through next (fiscal) year at least, though that may rely on side agreements.

  10. Salamander

    Any word about clawbacks and stiffing the employees and contractors that should have been paid under the current 2022 budget? Or was the debt ceiling increase "clean"?

  11. ruralhobo

    Winners: Joe Manchin, who in the end was the only one who got EVERYTHING he wanted.
    Joe Biden, whose cognitive capabilities will not be questioned for a while and who beat Trump like a drum on his own GOP terrain.
    Americans, except a handful who are in politics.
    Ukraine and most of the world, I guess.
    Oh, and the US dollar.

    Losers:
    Donald Trump, bigly. Nobody paid any attention to his commands on the debt ceiling.
    Vladimir Putin.
    The House Freedom Caucus.
    The renminbi.

    1. Joseph Harbin

      It's a remarkable thing how little anyone (GOP included) gives a damn about what Trump thinks should be done. Same thing happened during his administration. His own people ignored him time and again.

      He's the weakest strongman ever. Yet the whole GOP is too frightened to criticize him. A party of poltroons.

  12. middleoftheroaddem

    It feels like the GOP achieved a victory that is more symbolic than substantive.

    Given the GOP control of the House, if one is realistic, this is basically a good Democratic outcome.

  13. Art Eclectic

    But can it pass? Is the crazy caucus hell bent on total destruction? Will McCarthy hold on to his seat? I don't think this is over by a long shot.

    1. Altoid

      Part of this deal has to be that Jeffries will supply whatever number of D yeas would be needed to pass it, and there are more than enough who would be willing. The Krazy Kaucus Klowncar knows this. So their choice amounts to blowing things up by pulling the "vacant chair" ploy or not, and if the answer is yes, whether it's before the vote or after.

      If before, there's no deal and no debt ceiling and default still looms, with only their own fingerprints all over it. They run from actual responsibility so I think they'll avoid this and let the deal pass. McConnell has made all kinds of noise about how he won't get in the way of anything so I think the senate will also pass it easily.

      Assuming this is what happens, the remaining interesting (but far less consequential) issue will be whether the KKK actually moves a vacancy after the vote. And this deal is through 2024, ie for the rest of this congressional term, so unless these guys torpedo McCarthy before the vote, there wouldn't be any real point to blowing things up after it. It would only blow up their side of the aisle, with no real hope to force any new terms to replace these.

      This would be the biggest reason why McCarthy jumped aboard this train. He gets a very little bit of what his crazies wanted, a little bit of what his other members and moneybags wanted, and job protection because it's a two-year agreement.

      And the KKK gets a lesson in how well minority rule works (spoiler: not). It'll make them noisier and more obnoxious to grab media time, but they'll be effectively sidelined in substantive terms.

      1. ScentOfViolets

        If before, there's no deal and no debt ceiling and default still looms, with only their own fingerprints all over it.

        I tend to think that this was what team Biden was going for. I suspect that at some point in the one-on-ones Biden had the thought without being unduly Machiavellian he could make McCarthy his bitch.

  14. Joseph Harbin

    I'm on record saying that Biden should not have negotiated. I stand by that. He should have stuck to his guns, and in the end I think we'd have a good chance of being rid of the undemocratic and unconstitutional debt ceiling once and for all. (We still might see that scenario play out if the deal doesn't get approved by Congress.)

    The deal is a victory for no one. But it could have been worse! Which is exactly what people say when they don't win. Someday we'll have another global depression and somebody will say, 'Still better than a nuclear holocaust.'

    If the deal does wrap up the budget that had to be negotiated in a few months anyway (I'm not sure), then this makes the deal a win for Biden and the Dems.

    Aside from the details of the deal, I think this is a lost opportunity to create a new dynamic in our politics. We must jettison the prevailing framework that pundits and much of the public take for granted, since Gingrich and Reagan at least.

    Ideas like:
    1. It's OK for Rs to take hostages to get their way while lacking elected majorities to implement an agenda (Ds will not and cannot do that)
    2. Taxes can never be hiked, even in a "compromise" to close the deficit
    3. Debt is growing out of control blah blah blah (no, it's not)
    4. Ds are out of control re govt spending and only Rs are fiscally irresponsible.

    Re #4: It's remarkable how ingrained that idea is, when the reality is exactly the opposite. A million examples, inc. one this week: A wonk from the self-billed "moderate" Niskanen Center was repeating the same nonsense, saying it's NOT an "objectionable claim" to say Ds spend more than Rs. But the fact is, since Reagan, fed spending has ballooned during R presidencies and gone flat or shrunk during D presidencies. Only D presidents have shown any so-called fiscal responsibility. Why do people believe the falsehood and not the truth? Because the Rs have a very effective propaganda operation and media (and Ds) fail to call them on their bullshit.

    For a look at spending history, see this Axios chart.

    1. ScentOfViolets

      Well, possibly. But the overiding priority in any case is to make sure the other side gets the blame should a deal not be reached. I'd say at this point Biden foxed 'em pretty good. Or at least, I don't see how even our highly partisan media can frame this as being the Democrat's (or Biden's or whomever) fault and make it stick should this latest agreement fall through.

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