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How To Enforce A Debt Deal: Through ‘Meat Axe’ Cuts Nobody Wants

The bipartisan legislation the House passed Wednesday to suspend the debt ceiling and impose spending caps contains a mysterious but important provision meant to force both sides to abide by the deal struck by President Biden and President Kevin McCarthy.

The 99-page measure would suspend the $31.4 trillion borrowing limit through January 2025. It would cut federal spending by $1.5 trillion over a decade, according to the Congressional Budget Office, effectively freezing some funds that had been projected increase next year and then cap spending at 1 percent growth in 2025.

But it also contained a number of side agreements that never appear in its text but were crucial in forging the bipartisan compromise and allowed both sides to claim they had gotten what they wanted from it. To try to ensure that Congress abides by the deal, negotiators used a time-tested technique lawmakers have used for decades to enforce deficit-reducing efforts: the threat of automatic and general spending cuts if they don’t finish. his work.

Is that how it works.

Congress is supposed to pass 12 individual spending bills each year to maintain government funding. But for decades, lawmakers, unable to agree on those measures, have bundled them into one huge piece of legislation known as an “omnibus” spending bill and pushed against the threat of a shutdown.

The debt limit deal would impose an automatic 1 percent cut on all spending, including military and veteran programs, which were exempt from the caps in the compromise bill, unless the dozen or so bills are passed and become law by the end of the calendar. year. Mandatory spending on programs like Medicare and Social Security would be exempt.

One problem is that, because the fiscal year that drives the congressional spending cycle ends earlier than the calendar year, on September 30, Congress would still need to pass a short-term bill to fund the government from October to December to avoid a shutdown.

The measure is a version of a plan offered by Rep. Thomas Massie, a Kentucky Republican, a key voter in moving the bill through the Rules Committee, who said he believed it would help prevent the US-controlled Senate from Democrats use the specter of a shutdown to force the House to swallow a bloated spending bill at the end of the year.

“They threaten you and bail you out with a lockdown,” Massie said in an interview in late April describing the plan. “They’ll tell you, ‘If you don’t pass the Senate bill, there will be a shutdown.’ I think we need to take that leverage away from anyone who risks a shutdown to get more spending. Just take that off the table.”

Some Republicans, including defense hawks, are furious about the move, arguing it would subject the Pentagon to irresponsible cuts. Sen. Susan Collins of Maine, the top Republican on the Appropriations Committee and her defense subcommittee, called it a “damaging” provision that would leave a “threat hanging over the Department” of Defense.

“It would trigger an automatic, massive, indiscriminate and sweeping cut to our already inadequate defense budget and discretionary domestic non-defense funding,” said Ms. Collins.

Democrats also have a strong incentive to avoid cuts, as they have always resisted cutting funding for federal programs.

Both parties stand to lose victories won through handshake agreements during negotiations if Congress is unable to pass their appropriations bills. Neither the White House nor House Republicans have released a full count of the deals that don’t appear in the bill, but some have been clarified.

The deals would allow Republicans to claim they are making deep cuts in certain spending categories while Democrats would ease the pain of those cuts in funding bills.

An unwritten but agreed compromise would allow appropriators to repurpose $10 billion a year in 2024 and 2025 from the IRS, a key priority from Republicans, who had opposed additional compliance funding advocated by Biden and Democrats.

Another side deal, sought by Democrats, that would evaporate if the spending bills were not written designated $23 billion a year in domestic spending outside of military funding as “emergency” spending, essentially exempting that money from ceilings in the agreement.

jim tankersley contributed reporting.