Agreement on the U.S. debt ceiling provides for its increase until 2025

The agreement between Republican congressmen and the White House on the budget would raise the U.S. debt ceiling until January 1, 2025. The text of the bill was published Sunday on U.S. House Speaker Kevin McCarthy’s website.

“A temporary increase in the national debt ceiling through Jan. 1, 2025,” the text of the document reads. It specifies that “on January 2, 2025, the” national debt ceiling will be reached. This could lead to a possible default unless the government takes emergency measures or raises the debt limit again.

“For the first time in more than a decade, we are cutting spending year-over-year while fully preserving funding for national defense and veterans’ health benefits,” McCarthy and his House colleagues Stephen Scalise, Tom Emmer and Alice Stefanik said in a joint statement.

A brief from Republicans in the lower chamber of Congress obtained, the agreement calls for $886 billion for defense in fiscal year 2024, $121 billion for veterans’ health care, and $637 billion for other non-defense programs.

As explained in the special briefing, the budget constraints will remain in effect until 2025. The final agreement differs significantly from the 22% cut originally proposed by Republicans in the House for “non-defense discretionary priorities,” which are allocated at the discretion of the current administration.

First, note that this is a two-year appropriations agreement. Under it, 2024 non-defense spending will remain about the same in 2023 if the negotiated appropriations adjustments are taken into account. In 2025, non-defense and defense spending would be increased by 1%. The adjustments I am talking about include a reallocation of emergency aid funds under COVID-19, as well as a reallocation of a portion of the mandatory funding for the U.S. Internal Revenue Service.

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