US debt ceiling crisis averted: What are the key points of the bill passed in US House of Representatives?

A cap and a raise

Under the deal struck earlier by Biden and McCarthy, the $31.4 trillion debt ceiling will be suspended until January 2025 — until after Biden’s current term. Till then, the government can keep borrowing to fund itself. In return, the White House has agreed to cap non-defence discretionary spending at 2023 levels in 2024, and increase it by 1% the year after. The agreement keeps non-defence spending flat next year, with a 1% rise in 2025, the BBC reported.

This is a climbdown, as Republicans had earlier demanded that the spending be capped at 2022 levels.

Work requirements made stricter

In a climbdown from the Democrat side, Biden has agreed to increase work requirements for those who avail of government food stamps.

The Supplemental Nutrition Assistance Program (SNAP) currently allows able-bodied people above 50 with no dependents to get the food stamps for three months “during any 36-month period when they cannot show they are employed or in a work or training program for at least 20 hours a week,” according to NPR. Under the new deal, this age limit will be raised to 54. Veterans and the homeless are exempt from this. These changes are in effect till 2023, unless renewed.

The non-partisan Congressional Budget Office (CBO) said their drive to impose work requirements on older Americans receiving food stamps would end up boosting spending by $2.1 billion over the time period, the AP reported, as exempting veterans and homeless people would still expand the food stamp rolls by 78,000 people monthly.

Social Security and Medicare are exempt from spending cuts, as is Biden’s student debt waiver scheme, although that faces a Supreme Court test.

IRS, Covid fund

Under the deal, the outlay the Biden government had secured for beefing up the Internal Revenue System (IRS) sees a cut. The White House had argued that more staffers at the IRS would ensure the super-rich pay their taxes, boosting revenue. However, the Republicans had said this would lead to middle class Americans facing more tax hassle.

Leftover Covid relief fund will be taken back, including that kept aside for tackling disasters. BBC said the CBO has estimated this will amount to about $30 billon.

Streamlining energy projects approval

The government has agreed to the Republican demand of a more streamlined system of approval for energy projects. According to The New York Times, “A single lead agency would be charged with developing a single review document according to a public timeline. The agreement would enact these changes without curtailing the overall scope of the current review process, cutting down the statute of limitations, imposing barriers to standing or taking away injunctive relief or other judicial remedies.”

The BBC said the new rules will make it easier for both fossil fuel and renewable energy projects to get licences.