Biden’s Clever Debt Ceiling Tactic: Triumph Through Fine Print

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White House Budget Director Shalanda Young Negotiates Debt Limit Deal

Shalanda Young, the White House budget director, joined a team of Biden administration officials in intense negotiations with House Republicans to avert a catastrophic government default. The Republican caucus refused to raise the nation’s $31.4 trillion borrowing limit without deep spending cuts.

Penalizing Republicans’ Cherished Programs

Young and her staff devised a plan to penalize Republicans’ most cherished spending programs if they failed to follow the agreement. The Biden team wanted to win on substance, including deep spending cuts, clawbacks of unspent federal coronavirus relief money, and stringent work requirements for recipients of federal aid.

The Fiscal Responsibility Act of 2023

President Biden signed the Fiscal Responsibility Act of 2023 into law just days before a potential default. The full final agreement’s spending cuts appeared to save $1.5 trillion over a decade, but side deals and accounting tricks resulted in actual cuts totaling as little as $136 billion over the two enforceable years. Much of the $30 billion in clawed-back Covid-19 money was probably never going to be spent, according to Biden officials.

Democrats Furious Over New Work Requirements

Many Democrats were upset that the deal included new work requirements that could push 750,000 people off food stamps, which the Biden team begrudgingly accepted. To counterbalance this, they sought to expand food stamp eligibility for veterans, the homeless, and others, which Republicans agreed to do. The budget office concluded that the changes would add recipients to the program overall.

Criticism of Negotiating Over Debt Limit

Some Democrats and progressive groups criticized President Biden for negotiating over the debt limit, claiming that he cemented Republicans’ ability to ransom the borrowing limit whenever a Democrat is in the White House.

Biden’s View on the Agreement

President Biden sees the agreement as a good deal and was pleased that a larger percentage of Democrats in both the House and Senate voted for the deal than Republicans. His economic advisers, including Lael Brainard, the director of the National Economic Council of the United States, and U.S. Treasury Secretary, Janet L. Yellen, warned of catastrophic damage to the economy if the government could not pay its bills on time.

Read More of this Story at – 2023-06-03 18:58:09

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