WASHINGTON (AP) — One of the end results is transparent as Washington reaches a budget deal in the impasse over the debt ceiling: The ambitious era of government spending to deal with the pandemic and the reconstruction of COVID-19 is giving way to a new one of adapted overinvestment and deficit containment.
President Joe Biden said recovering unspent coronavirus money was “on the table” of budget talks with Congress. While the White House has threatened to veto the Republican speaker of the House. . .
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WASHINGTON (AP) — One of the end results is transparent as Washington reaches a budget deal in the impasse over the debt ceiling: The ambitious era of government spending to deal with the pandemic and the reconstruction of COVID-19 is giving way to a new one of adapted overinvestment and deficit containment.
President Joe Biden said recovering unspent cash from the coronavirus was “on the table” during budget talks with Congress. While the White House has threatened to veto Republican House Speaker Kevin McCarthy’s debt ceiling bill with his “devastating cuts” to federal programs, the administration has signaled its willingness to other budget caps.
The end result is a shift from just a few years ago, when Congress passed and then-President Donald Trump signed the historic $2. 2 trillion CARES Act at the start of the public fitness crisis in 2020. It’s a dramatic realignment even as Biden’s bipartisan infrastructure bill and the Inflation Reduction Act are now pouring thousands of dollars into paving streets, strengthening federal support, and restructuring the American economy.
“The appetite to invest a lot more money in major issues right now is particularly diminished, given what’s been observed in recent years,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center, a nonpartisan organization in Washington.
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The Treasury Department warned it would start running out of cash to pay for the nation’s spending starting June 1, though a Friday estimate of the nonpartisan congressional budget set the deadline for the first two weeks of June, which could buy negotiators time. .
“We’re not there yet,” Biden told reporters Saturday before flying to Delaware for the weekend. “There is a genuine discussion about some of the adjustments we can all make. We’re still there. “
Staff negotiators resumed talks on Saturday.
The contours of a deal between the White House and Congress are within success even if the political will to get out of the standoff is uncertain. years, and pass reforms to ease the structure of energy projects and other developments, according to those familiar with officials speak of closed doors. They were not authorized to discuss personal deliberations and spoke on condition of anonymity.
The White House has been reluctant to engage in the talks, insisting it is only willing to negotiate over the annual budget, the debt ceiling, and Biden’s team is skeptical about McCarthy’s ability to reach an agreement with his far-right majority in the House.
“There is no debt ceiling. There is no negotiation on the debt ceiling,” White House press secretary Karine Jean-Pierre said.
McCarthy’s allies say the White House fundamentally underestimated what the new Republican leader was able to accomplish, first in the grueling fight against the House speaker and now by approving the House bill with $4. 5 trillion in savings as an initial offer in negotiations. The two encouraged McCarthy to push for an agreement.
“The White House has always understood where we stand on the House,” said Russ Vought, president of the Center for American Renewal and former director of Trump’s Office of Management and Budget. “They’re dealing with a new animal. “
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The country’s debt has soared in recent years to $31 trillion. That’s roughly double what was the last primary debt ceiling confrontation a decade ago, when Biden, as Vice President Barack Obama, faced the newfound elegance of Tea Party Republicans and not easy spending cuts in exchange for a buildup on the debt ceiling.
While the policy of debt restraint has intensified, the nation’s debt is nothing new. the death toll has been in the red for much of its history, since before the Civil War. That’s because government spending is more than tax revenue, which helps subsidize the comforts Americans have: national security, public works, federal backing, and operations critical to running a civil society. In the U. S. , Americans pay the lion’s share of taxes, while businesses pay less than 10%.
Much of the COVID-19 spending approved at the start of the pandemic has run its course and government spending has returned to mainstream levels, Mavens said. This includes loose vaccines, small business payroll, emergency bills for individuals, monthly taxes for children’s credits, and more food assistance that Americans and the economy have.
“Most of the wonderful things we’ve done are already done, and they’ve been done very well,” said Sharon Parrott, president of the Center on Policy and Budget Priorities in Washington.
“We have shown that we know how to decrease poverty and build health insurance in the midst of what would have been an expansion of hardship,” he said.
Last year, Biden’s inflation-lowering bill, which was enacted in opposition to Republican opposition, was largely funded through savings and new revenue elsewhere.
The popularity of some spending, namely children’s tax credits as part of COVID-19 relief and the Inflation Reduction Act’s efforts to combat climate change, shows countries’ political thirst for the kind of investments that some Americans will help boost America entirely. towards a twenty-first century economy.
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Case in point: A core organization of Republican lawmakers in the Midwest blocked a repeal of biofuel tax credits from the Inflation Reduction Act that their colleagues wanted to eliminate, persuading McCarthy to leave that out of the House bill. Investments in maize-intensive agricultural states.
While Republicans in McCarthy’s House are now not easy to make budget cuts in exchange for a buildup on the debt ceiling, they have time to say what government systems and services they do, in fact, plan to cut.
House Republicans have strongly rejected Biden’s claims that his bill would reduce services and veterans.
McCarthy, in his meeting with the president, went so far as to tell Biden that it’s “a lie. “
Republicans promise to exempt the Defense Department and veterans’ health care once they work out actual spending to conform to the House’s debt ceiling proposal, but there is no written guarantee that those systems will be cut.
In fact, Democrats say that if Republicans avoided cuts in defense and veterans, cuts in other departments would succeed by 22 percent.
Budget observers repeat that the debt challenge is not necessarily the amount of the debt burden, which comes from one hundred percent of the country’s gross domestic product, but whether the federal government can continue to repay the debt, especially as interest rates rise.
On Friday, from the White House, Mitch Landrieu, infrastructure implementation coordinator, spoke about the $1. 2 trillion bipartisan infrastructure bill Biden signed 18 months ago. He said it creates jobs, stimulates personal investment and shows what you can do when the parties come together.
“We say once in a generation because it didn’t happen during our lifetime and, frankly, it probably won’t happen again in the near future,” he said.
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PA White House correspondent Zeke Miller and Associated Press Seung Min Kim contributed to this report.