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Under the legislation, $11 billion in rescinded unobligated Covid-19 relief funds and $10 billion in money shifted from the Internal Revenue Service will be used to beef up non-defense discretionary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.
