6 pillars of the debt ceiling deal

The debt ceiling deal that President Joe Biden and House Speaker Kevin McCarthy struck late Saturday is a true meet-you-halfway compromise between the stark ultimatums the leaders have issued for months.

A far cry from the “clean” increase Biden had sought for the nation’s $31.4 trillion borrowing cap, the bipartisan agreement is also much less punchy than the sweeping package House Republicans passed last month as they demanded drastic spending cuts, major changes to energy permitting rules and an end to many of Biden’s signature accomplishments, including student loan forgiveness and pieces of the Inflation Reduction Act.

While the details are still fuzzy, with the text due to be released sometime Sunday, the agreement is undoubtedly the most monumental debt limit compromise the two parties have struck in more than a decade. If party leaders can whip enough support to clear the deal through both chambers in the coming days, it would largely freeze non-defense discretionary funding in the fiscal year that kicks off in October, revive the threat of across-the-board cuts and impose the most substantive restrictions in decades on the country’s leading anti-hunger program.

Here are the six main pieces of the agreement, according to people with direct knowledge of the deal:

Work requirements

The deal would tighten restrictions for the SNAP food assistance program, as well as emergency cash aid known as Temporary Assistance for Needy Families.

New time limits would be phased in for people without children up to age 54 to receive food assistance through SNAP if they do not complete certain work requirements. Under current law, those time limits only apply to people up to 49 years old. Those expanded limits will sunset in 2030.

Democrats secured some exemptions for homeless people and veterans. But the move will still enrage a wide swath of congressional Democrats, especially key progressives who pleaded with White House officials in recent days to reject any concessions for aid programs.

Republicans also pushed to include new work requirements on Medicaid, but the White House made clear early on it would not negotiate any changes to that program.

Energy permitting

The deal also appears to offer no major advances in one policy issue where both Democrats and Republicans have hoped to find agreement: speeding up the process of issuing federal permits for energy projects.

GOP lawmakers — joined by Democratic Sen. Joe Manchin of West Virginia — had sought faster approvals for oil and gas pipelines and other fossil fuel projects. Meanwhile, many Democrats want to hasten the process for approving clean-energy infrastructure, including the power lines that would be needed to ferry vast amounts of wind and solar power across the country to meet Biden’s climate goals.

In the end, the timeline for avoiding a default on the national debt appeared to be too tight to allow the parties to work out a grand bargain on permitting, an issue some lawmakers still hope Congress can take up this year.

Instead, the deal produced only minimal changes to the current permitting process, according to one person familiar with the provisions, who spoke on condition of anonymity late Saturday. The agreement includes adding “process efficiencies” to the decades-old law governing federal environmental reviews of projects, and calls for designating just one lead federal agency to review a particular permit.

But in a big win for Democrats, the deal keeps intact the hundreds of billions of clean energy funding in Democrats’ trademark climate law, the Inflation Reduction Act, that Republicans had sought to repeal.

Covid aid clawbacks

The deal would take back billions of dollars in unspent Covid relief funds Congress has doled out since 2020, impacting a wide range of current and future health efforts. Democrats recently warned that the cuts would hit vulnerable populations particularly hard, including veterans and tribal members, and undercut efforts to prepare for future pandemics.

Federal health officials are sounding the alarm about the impact the cuts are likely to have on state and local health departments’ work on HIV, other STDs and new viral outbreaks, such as mpox.

Democrats also highlighted the cuts would delay the replenishment of the Strategic National Stockpile, heightening the possibility, should a new pandemic emerge, of a repeat of the early days of Covid when masks, swabs, ventilators, medication and other crucial supplies had to be rationed. But the White House claims the deal would protect critical funding to prepare for future pandemics and Covid surges.

IRS cuts

A portion of the $80 billion in funding Democrats pushed through for the IRS last year would be clawed back. That pot of money is supposed to help the agency super-charge its ability to go after wealthy tax cheats, modernize its IT systems and improve customer service.

Republicans have been on a tear against the funding for months, saying it would primarily be used to go after average taxpayers, despite the Biden administration’s vow not to increase usual audit rates for those making less than $400,000.

While the administration fought to wall off the money, the cut is expected to be relatively small compared with what the GOP had pushed for all year. House Republicans used their first vote after taking over the chamber this year to call for rescinding more than $70 billion of the funding, while leaving some money intact for taxpayer service improvements.

The debt-limit agreement probably won’t please either side, though Republican lawmakers have more reason to be disgruntled than Democrats since the funding isn't being eliminated.

Spending caps

For Republicans, the two-year budget accord is a far cry from the $130 billion in spending cuts the party first sought for the coming fiscal year and fails to limit spending for a decade as many in GOP lawmakers wanted.

Instead, it would keep non-defense funding largely flat for the fiscal year that begins in October, at about $637 billion. Defense funding would be capped at Biden’s budget request, at $886 billion, about a 3.5 percent increase. Veterans’ medical care would also match the president’s request, at $121 billion in fiscal 2024.

Non-defense spending would increase by 1 percent in 2025, followed by years of non-enforceable funding targets. Congress would have to pass all 12 of the annual funding bills by the end of January or face a stopgap funding patch that cuts spending by 1 percent across the board.

The deal is a much less favorable outcome for Democrats than the two-year budget deal cemented in 2019 by then-President Donald Trump and then-Speaker Nancy Pelosi. In a victory for House Democrats at the time, both sides agreed to provide a bigger funding boost for domestic programs than for the military.

Student loans

Conservatives had been trying to use the debt ceiling to force the White House to retreat on Biden’s plan to cancel up to $20,000 of student debt for tens of millions of Americans. The deal reached Saturday would leave that program unchanged, according to a person familiar with the negotiations.

But the agreement does codify into law the Biden administration’s plan to end the ongoing freeze on monthly student loan payments and interest at the end of the summer, according to a source familiar with negotiations. The Education Department had previously been preparing to restart payments after the start of September.

GOP lawmakers have been pressing the administration to resume collecting student loan payments, blasting the roughly $5 billion cost each month of keeping nearly all federal student loans paused.

The debt ceiling bill passed by Republicans last month would have permanently curtailed the Education Department’s authority to freeze student payments. But the deal would not go that far, protecting the agency’s ability to pause payments in the event of future emergencies, according to a person familiar with the negotiations, who also said the administration’s plan to expand income-driven repayment would be protected.

Even though the White House staved off any rollbacks of its student debt relief in the deal, the future of the program remains uncertain. The Supreme Court is preparing to decide in the coming weeks whether to allow Biden to move ahead with canceling the debt.

Michael Stratford, Toby Eckert and Alice Miranda Ollstein contributed to reporting.

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McCarthy and Biden reach agreement in principle on debt limit

White House and congressional GOP negotiators have reached an agreement in principle to avert a debt default, according to two people familiar with the deal. Now they have to get it to President Joe Biden’s desk in time.

Hill leaders will now race to draft and pass the deal as quickly as possible — through both the House and Senate — ahead of the June 5 deadline. McCarthy said he expected bill text would be finalized Sunday and that the House would vote on the legislation Wednesday.

And both Biden and Speaker Kevin McCarthy still have to sell their respective parties on the agreement, navigating fraught votes in both chambers. The two will talk again Sunday, McCarthy said.

“After weeks of negotiations we have come to an agreement in principle," McCarthy said Saturday night. "We still have more work to do tonight. To finish the writing of it.”

In addition to lifting the $31.4 trillion borrowing cap through the 2024 presidential election, the deal in principle would keep non-defense spending roughly flat for the fiscal year that begins Oct. 1, according to a person familiar with the negotiations, falling far short of the $130 billion in cuts at fiscal 2022 levels that Republicans had originally demanded.

Non-defense spending would increase by 1 percent in 2025, followed by years of non-enforceable funding targets, according to the person familiar. Republicans had initially pushed for a decade of strict funding limits.

In a win for Biden, defense spending would be set at the level proposed in his budget for the coming fiscal year, representing a modest 3.5 percent increase over current funding levels — less than what many Republican defense hawks would’ve liked to see for the Pentagon in order to keep pace with inflation.

The agreement includes new policy changes to the TANF and SNAP programs, including time limits on people up to age 54, according to a source familiar with the negotiations who was not authorized to share details publicly. The deal would include new work requirements in TANF for cash assistance recipients but a modified version of the House-passed bill. The changes are likely to be unpopular with House Democrats.

But it imposes no new work requirements for Medicaid, a win for the White House.

In other key wins for the White House, the agreement protects the environmental provisions from the Inflation Reduction Act, including clean energy funding. It also doesn’t touch Biden’s student debt relief plan.

McCarthy, speaking to reporters, touted that the deal had “historic reductions in spending,” no new taxes, no new government programs and would make reforms to “lift people out of poverty," referring to the adjusted work requirements.

Republicans are expected to need a sizable number of Democrats to help them clear the bill through the House amid early signs that conservative members of the Freedom Caucus are unlikely to support a deal that is significantly different than a bill the House passed last month.

But the deal in principle still marks the first major piece of legislation negotiated between the McCarthy-led House GOP and the Biden administration since Republicans took over the majority in January.

Biden and McCarthy spoke on the phone just hours before the deal was announced in an attempt to resolve final sticking points, including a GOP push to include work requirements on social safety net programs. And the agreement followed days of closely watched negotiations between Reps. Garret Graves (R-La.), Patrick McHenry (R-N.C.), OMB Director Shalanda Young and Steve Ricchetti, a trusted Biden counselor.

But Hill leaders and the White House still have major political hurdles to overcome. The grind of the legislative process could push Congress up against the June 5 deadline, when Treasury Secretary Janet Yellen has warned the country will run out of money to pay its bills.

House GOP leaders have pledged to give their members a full 72 hours to review a bill. They’ve bent that rule this year already, but Republicans have vowed they won’t try to truncate the time on any debt limit legislation. Even leadership allies believe doing so would threaten GOP support for the deal.

GOP leadership will brief the conference at 9:30 p.m. on the contours of the agreement by phone late Saturday night, preceding what will likely be a major whipping operation. And House Democrats are planning to have a member call at 5 p.m. Sunday, according to a person familiar with the details. Though the House left on Thursday for a Memorial Day break, members were warned they might have to return to Washington with 24 hours' notice.

The bipartisan deal is expected to test McCarthy’s hold on his right flank, including members of the House Freedom Caucus.

Republicans have largely remained unified since they passed their own debt proposal earlier this month, but the bipartisan deal is already sparking criticism from conservatives that McCarthy has worked to appease in the lead-up to and since becoming speaker.

As negotiators worked Saturday to finalize the deal, GOP Whip Tom Emmer (R-Minn.) and Rep. Guy Reschenthaler (R-Pa.) huddled in McCarthy’s office. Emmer, speaking to reporters, had a message for the conference: Don’t believe what you are hearing about a potential deal until you talk to us.

“Our job is to make sure that members are well aware that there is no agreement. … We’re constantly in touch with our members letting them know that what is being reported, you should not accept. There is no agreement," Emmer said.

McCarthy needs to get a majority of his own conference to support the deal, something he predicted Saturday that he wouldn’t “have any problem” doing. But given the all-but-certain conservative rebellion, he’s also going to need votes from House Democrats, who have vocally urged Biden to not bend to GOP demands in order to clinch an agreement.

And as he faced outside pressure from House Democrats, Biden has also sought to portray himself as willing to go to bat for his party’s priorities. Asked Friday about concerns that he could give too much away to Republicans on work requirements, Biden clapped back: “I don’t bow to anybody.”

Even once it clears the House, the bill still needs to go through the Senate, where it is expected to take days to get to a final vote unless all 100 senators agree to speed things up. But a fast-track appears unlikely after Sen. Mike Lee (R-Utah) vowed that he would “use every procedural tool at my disposal to impede a debt-ceiling deal that doesn’t contain substantial spending and budgetary reforms.”

Sam Stein contributed reporting.

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Trump slams Texas 'RINOS' over Paxton impeachment effort

Former President Donald Trump on Saturday gave his full backing to Ken Paxton as the Texas attorney general faced historic impeachment proceedings led by state Republicans.

Trump took to Truth Social to praise the embattled attorney general and condemn both “Radical Left Democrats” and “RINOS” alike.

“I love Texas, won it twice in landslides, and watched as many other friends, including Ken Paxton, came along with me,” Trump wrote. “Hopefully Republicans in the Texas House will agree that this is a very unfair process that should not be allowed to happen or proceed—I will fight you if it does.”

Trump lashed out in particular at Texas House Speaker Dade Phelan, who Trump called “barely a Republican at all.” Trump also declared the proceedings “election interference,” and said “Free Ken Paxton, let them wait for the next election!”

In 2020, Paxton asked the U.S. Supreme Court to overturn President Joe Biden’s electoral defeat of Trump.

Scandals have followed Paxton throughout his career, with the latest accusations of bribery and abuse of public trust resulting in the GOP-majority House convening Saturday to begin impeachment proceedings.

If impeached — as only the third official in Texas’ history to meet such a fate — Paxton would be removed from office pending a Senate trial. Republican Gov. Greg Abbott would appoint an interim replacement. Final removal would require a two-thirds vote in the Senate, where Paxton’s wife, Angela, is a member.

U.S. Sen. Ted Cruz (R-Texas) also expressed support for Paxton, calling the impeachment proceedings a “travesty” in a series of Tweets Saturday.

“No attorney general has battled the abuses of the Biden admin more ferociously—and more effectively—than has Paxton,” Cruz wrote. “That’s why the swamp in Austin wants him out. The special interests don’t want a steadfast conservative AG. I understand that people are concerned about Ken’s legal challenges. But the courts should sort them out.”

In a statement released Thursday, Paxton called the accusations “hearsay and gossip,” before claiming that the impeachment proceedings were “an attempt to overthrow the will of the people and disenfranchise the voters of our state.”

On Friday, he called for his supporters to “peacefully come let their voices be heard at the Capitol tomorrow.”

During the course of the proceedings Saturday, Republican state Rep. Charlie Geren took to the floor to allege that multiple members of the House body had received direct phone calls from Paxton threatening their political career.

“I would like to point out that several members of this House, while on the floor of this House, doing the state business, received telephone calls from [Attorney] General Paxton personally, threatening them with political consequences in their next election,” Geren said.

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EU markets chief says Twitter 'can't hide' after platform ditches disinformation code

Fighting disinformation online will be a "legal obligation" under new rules coming into force in August, EU commissioner says.

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New sanctions against Russia stuck in limbo over Greek-Hungarian protest

Odd couple is holding back deal on new sanctions against Russia.

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White House hits Republicans over work requirements in debt talks

The White House pushed back aggressively late Friday on the GOP effort to add new work requirements to social safety net programs as part of the debt deal, signaling a deepening divide between the two camps on the issue even as outlines of other parts of a potential spending agreement emerged.

“House Republicans are threatening to trigger an unprecedented recession and cost the American people over 8 million jobs unless they can take food out of the mouths of hungry Americans,” White House spokesperson Andrew Bates said in a statement to POLITICO. He cited GOP demands for “new, additional work requirements designed to tie the most vulnerable up in bureaucratic paperwork, which have shown no benefit for bringing more people into the workforce.”

Bates criticized Republicans for pushing new work requirements for deficit reduction while trying to permanently extend the Trump tax cuts, which CBO recently estimated would cost $3.5 trillion.

“President Biden and House Democrats are standing against this cruel and senseless tradeoff,” Bates added.

Work requirements have been a major sticking point in the ongoing talks. Republicans are seeking to add them to programs that help low-income families — specifically SNAP and the Temporary Assistance for Needy Families programs, both of which already contain some form of work requirements. But they appear to have backed down from earlier efforts to add new layers of work requirements to Medicaid.

Earlier Friday, Rep. Garret Graves (R-La.), Speaker Kevin McCarthy’s emissary in the negotiations, said Republicans need work requirements in a deal. “Hell no,” he said when asked by a reporter whether the GOP would back down on the issue.

Congressional lawmakers and the White House were expected to continue debt negotiations through the weekend. But both sides got a bit of a reprieve Friday night when Treasury Secretary Janet Yellen sent Congress a new estimate that showed the default deadline to be June 5, four days later than the previous estimate.

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5 things we know about Ron DeSantis' campaign, post Twitter fiasco

Ron DeSantis bounced back from his glitchy launch event with a hefty fundraising haul and a flood of media appearances. The Florida governor’s first 36 hours in the race revealed a lot about what kind of candidate he’s trying to be — more conservative than Donald Trump but cautious of offending the former president’s most die-hard supporters.

Here are five takeaways from the first day-plus on the trail for the newest entrant into the Republican presidential primary:

He’s running to Trump’s right

A swirl of speculation leading up to DeSantis’ launch crystallized into one big, existential question: How would he handle Trump — his political benefactor-turned-primary-rival — without offending the former president’s loyal base? DeSantis began to answer that question on Thursday: Quite simply, it’s to get to Trump’s right.

While largely praising Trump’s platform, DeSantis touted his signing of a six-week abortion ban that Trump said even Republicans consider “too harsh.” He questioned the ex-president’s support for providing amnesty for 1.8 million undocumented immigrants — an assertion Trump blasted in a press release as a “deceptive attempt to distract voters from his presidential campaign launch melt down.” And he contrasted himself with Trump over Covid-19, touting his aggressive push to keep schools, businesses and public spaces in Florida open in the midst of national lockdowns during Trump’s presidency.

“He’s obviously attacking me from the left,” DeSantis said during a midday hit with radio host Matt Murphy, later adding: “I don’t know what happened to Donald Trump. This is a different guy today than when he was running in 2015 and 2016 and I think the direction that he’s going with his campaign is the wrong direction.”

While DeSantis was prosecuting an argument over Trump’s Covid record — an argument he’s been making in recent speeches — his advisers hammered away on Twitter. In response to a mock video posted by Donald Trump, Jr. showing DeSantis getting pummeled in one of his introductory videos, DeSantis adviser Christina Pushaw tweeted: “Your dad could not even tackle the 110 lb. Keebler Elf known as Anthony Fauci.”

He’s wary of antagonizing Trump’s hyper-loyal base

Polling shows Trump dominating the Republican field, buoyed by a following that continues to believe his baseless claim that the 2020 election was stolen. For as much as DeSantis was drawing a contrast with Trump, Day 1 was also a demonstration of exactly how careful he is not to upset that base.

“Most of our voters obviously appreciate a lot of the things President Trump did. I do — I mean he’s been attacking me a lot but I still give him credit for the things that he did well, especially with the economy in the first three years,” DeSantis said during a Thursday evening interview on Newsmax.

He avoided attacking Trump’s extensive legal troubles and steered clear of personal criticism of his chaotic style. In an interview on “The Clay Travis & Buck Sexton Show," he even said he might pardon people involved in a Trump-inspired attack on the U.S. Capitol on Jan. 6, 2021. Instead, DeSantis focused on what he believes is his best pitch: Electability, repeatedly implying Trump does not stand a chance of winning a general election next year.

The money hype is real

One of DeSantis’ biggest advantages entering the GOP primary is his ability to raise significant sums of money. He has more than $80 million in a state account that can be transferred into a super PAC supporting him, and that PAC — Never Back Down — has reported raising at least $33 million to date. (The PAC’s official filings are not yet publicly available with the FEC.)

It got even better for him on Thursday evening, when DeSantis’ team said he took in $8.2 million during the first 24 hours after his Twitter launch. Everyone assumed DeSantis would have a financial advantage. But the timing of his haul this week was significant — a show of force that helped him to move the topic of conversation away from the technology glitches plaguing his rollout.

“Governor DeSantis has built the strongest, most sophisticated organization in the history of American politics, and the tremendous support we’ve experienced in the last 24 hours will be critical as we hit the ground running in the early nominating states to share [his] plan to revitalize the American Spirit,” campaign manager Generra Peck said in a prepared statement.

Since entering the race, he also received five New Hampshire endorsements from state representatives, bringing his total number of official supporters in the early voting state to 55, according to a Never Back Down spokesperson granted anonymity to speak freely about the campaign. The PAC deployed canvassers to New Hampshire to knock on nearly 4,000 doors since Wednesday, and its 189 canvassers in Iowa have knocked on roughly 39,000 doors in the Hawkeye State, which holds the party’s first caucus next year, the spokesperson said.

He’s sticking with Republican-friendly media

DeSantis, who spent much of his rollout lambasting the “corporate media” and “legacy media,” knows where the GOP primary audience is. So he stuck with friendly faces during his first 24 hours as a candidate.

After granting his first candidate interview to FOX News, he invited select reporters on a conference call Wednesday night before participating in a bevy of interviews on similarly Republican-friendly outlets. It worked for him, producing the kind of positive coverage he was hoping for.

“What you’ve done in Florida is simply astonishing. Can I offer you some criticism: I don’t think you take enough credit for it,” Tara Servatius, the host of The Tara Show — a popular radio program aired in North and South Carolina — said in reference to DeSantis’ landslide re-election victory in what was once a swing state.

DeSantis ended the day with a lengthy chat with Newsmax’s Eric Bolling, who joked that DeSantis — a college baseball player — was gifted “a lot of softball" questions from prior interviewers.

He still has his awkward moments

DeSantis has a deep understanding of policies, which was on display as he discussed in depth foreign affairs, inflation and energy policy in his interviews. A Yale graduate who went on to receive a Harvard law degree, he often refers to complicated concepts by their acronyms.

But the kind of small talk politicians encounter greeting voters on the trail still doesn’t come naturally to him. When Murphy, the radio host, asked him at the end of their interview if DeSantis would follow him on Twitter, he simply replied: “Alright, well, we’ll see what we can do.”

After he hung up, Murphy said to another host, “I didn’t like the end of the interview. I felt like that was a good opportunity for him to show a jovial side.”

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