WASHINGTON — Democrats appear set to swallow stricter work requirements for safety net programs and even a minor rollback of a key part of their signature legislative accomplishment in order to avoid a cataclysmic economic default and raise the debt limit for the next two years under a deal negotiated and blessed by President Joe Biden’s White House.
“The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing,” Biden said Saturday night in a statement announcing the deal. “And, this agreement is good news for the American people, because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost.”
The tentative agreement struck between Biden and House Speaker Kevin McCarthy (R-Calif.) on Saturday night would also hold non-defense spending flat for 2024 and impose limits for 2025, which Republican leaders are touting as big wins in the negotiations. That would mean defense spending would continue to rise even as funding for health care research, education and other progressive priorities would face an effective cut.
“It’s not a bill that’s going to make any Democrats happy,” said Rep. Jim Himes (Conn.), a leading moderate Democrat, during an appearance on Fox News. “But it’s a small enough bill that, in the service of actually not destroying the economy this week, may get Democratic votes.”
But McCarthy fell far short of fulfilling the boldest conservative dreams, failing to make meaningful changes to the nation’s long-term fiscal picture or hamper administration goals on climate or student loan relief.
“From what I can see, Republicans didn’t get any of the big things they were asking for,” Sen. Chris Murphy (D-Conn.) said on MSNBC. “President Biden kept most of the reckless things that Republicans were seeking for out of this agreement.”
To protect domestic spending from even steeper cuts, the White House agreed to roll back some of the $80 billion in additional funds for the IRS secured in last year’s Inflation Reduction Act.
Republicans, who have falsely argued the IRS money would lead to an army of agents to audit Americans, had sought a total rollback of the funding. The cuts to the IRS funding are actually expected to increase the deficit, since it will give the agency fewer resources to go after tax cheats.
The deal omits Republicans’ most controversial “work requirement” proposal, which would have denied Medicaid health care coverage to unemployed adults without dependents, many of whom gained coverage thanks to the Affordable Care Act. For most of its history, Medicaid has not limited benefits based on employment.
But according to a source familiar with the negotiation, the deal includes a version of the Republican proposal to tighten the existing work requirement in the Supplemental Nutrition Assistance Program, which provides food benefits to more than 20 million households.
“We have additional work requirements that are quite consequential,” Rep. Patrick McHenry (R-N.C.) told reporters Sunday morning.
Under SNAP’s current rules, childless able-bodied adults between the ages of 18 and 49 can have only three months of benefits unless they work, volunteer or participate in a training program for 20 hours per week.
The Biden-McCarthy deal would raise the age threshold for the SNAP work rule to 54, a key Republican demand.
But the deal exempts veterans and the homeless from the work requirement altogether — a major and unexpected change that would likely reduce the impact of the higher age threshold. The nonpartisan Congressional Budget Office said the original Republican proposal would have cut SNAP enrollment by 275,000. In a separate analysis of SNAP’s existing work requirements, the CBO has said that many people who would lose benefits are homeless.
The compromise also makes the work requirement adjustments temporary, sunsetting them in 2030, in another win for Biden.
“States that play games with how they roll over funds, and they accrue more account balances they use on other things, we take that gamesmanship down dramatically and significantly,” McHenry said.
However, the agreement gives in to Republicans on the Temporary Assistance for Needy Families program, which provides cash benefits to fewer than 1 million households. Republicans wanted TANF, the program most commonly called “welfare,” to require “work activities” from a higher percentage of families receiving benefits. The agreement includes a modified version of the GOP demand; it’s not clear how many families would be affected.
In talking points distributed to members of Congress on Saturday night, the White House emphasized the changes to TANF would not impact families with children.
“The changes to TANF that would have put cash assistance at risk for nearly 1 million children are not in the agreement,” White House officials wrote in a memo obtained by HuffPost. “The President fought to ensure states can continue to support those families and their children.”
Hard-line conservative Republicans trashed the deal on Sunday, complaining that it includes “virtually no cuts” they initially sought and that it spares key Democratic initiatives, including the vast majority of funding to the IRS Democrats approved last year and Biden’s student loan debt cancellation program. (The agreement does include a provision blocking the administration from extending a freeze on student loan payments beyond September, when the administration planned to end the freeze regardless.)
“I am appalled by the debt ceiling surrender,” Rep. Ken Buck (R-Colo.) wrote on Twitter, expressing a position shared by many of his fellow members of the hard-right House Freedom Caucus.
The deal would freeze spending this year, but, when adjusted for the growth of inflation, it would be scored by the Congressional Budget Office as a spending reduction, a technicality making some conservatives unhappy.
The agreement does, however, include a modest 3% increase in defense spending, as proposed by the Biden administration. Republicans sought an even bigger boost to the Pentagon to keep up with inflation.
Progressives, meanwhile, were notably more muted in reacting to the deal. House Democrats are scheduled to receive a briefing from the White House on the tentative agreement later on Sunday.
Rep. Pramila Jayapal (D-Wash.), the chair of the Congressional Progressive Caucus, said she would withhold judgment on the agreement until she sees the legislative text, which often surprises with details omitted from an initial negotiated framework.
“I’m not happy with some of the things I’m hearing about but they are not cutting the deficit and they are not cutting spending,” Jayapal said Sunday on CNN’s “State of the Union,” disputing claims from House GOP leadership that the agreement locked in major spending cuts.
Jayapal said it’s “really unfortunate the president opened the door” to stricter work requirements for food assistance programs, but added that “perhaps because of the exemptions it really will be OK, that I don’t know.”
Despite the muddled picture — and the lack of legislative text to fill out some still-vague details — McCarthy was determined to portray the negotiation as an unqualified victory for the GOP.
“There’s not one thing in this bill for Democrats,” McCarthy said while appearing on Fox News.
Kevin Robillard and Jonathan Nicholson contributed reporting.