The Biden-McCarthy debt limit deal of early June was limited in its reach and ambition, but one modest point in its favor was its promise of a more orderly appropriations process through the 2024 election. Now even that minimalist upside is in doubt as a few House GOP rebels want to force Speaker Kevin McCarthy to negotiate a different agreement, with lower spending targets, and then also, by some miracle, to get the Biden administration and congressional Democrats to accept it. That the demands of this group will never be met should be obvious. What is still in question is whether their push leads to a government shutdown when the current fiscal year ends next month -- an outcome that is more likely to hurt the GOP politically than the Democrats.
The dispute is mainly focused on the central provisions of the recent agreement -- officially the Fiscal Responsibility Act, or FRA -- that paved the way for raising the statutory limitation on total government debt. In return for providing more room for borrowing, both sides consented to the imposition of statutory caps on appropriations for fiscal years 2024 and 2025, with separate top lines for defense and nondefense accounts. Any spending above those limits -- aside from emergencies and exceptions that both sides embrace -- will be eliminated through automatic across-the-board cuts.
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