WASHINGTON − Just days before a possible default, President Joe Biden and House Speaker Kevin McCarthy struck a deal late Saturday to raise the debt ceiling in exchange for caps on future spending and other demands from Republicans.
The deal now faces an unclear outlook in Congress, where progressive Democrats and hard-line Republicans have both criticized components of the agreement. McCarthy, who has dubbed the bill "The Fiscal Responsibility Act," is eyeing a vote Wednesday in the House.
Here are seven takeaways on what's in the debt ceiling deal − and what isn't.
Raises the debt ceiling until 2025
The tentative deal raise the debt limit on how much the government can borrow until 2025, averting a default that could happen June 5 if the debt ceiling is not raised.
This was always Biden's top priority. The president could not afford an economic disaster to unfold as a result of a default.
The extension means Congress will not have to deal with the debt ceiling again until after the 2024 election, which could shake up power in Congress and control of the White House. If Biden wins reelection and Democrats regain control of the House, this year's type of brinkmanship would be avoided.
Spending caps for two years
The deal caps annual discretionary spending for two years, keeping nondefense spending levels flat next year and raising it by 1% in 2025. This means that funding for domestic programs across the board − besides Social Security and Medicare − will stay the same next year.
Perhaps the biggest sticking point in talks, spending caps were a top priority for Republicans, who initially fought for 10 years of annual spending limits and then six years as negotiations continued.
In the end, what emerged was a classic give and take.
The deal sets six years of appropriations "targets," but unlike the first two years of caps, the targeted spending levels aren't enforceable. The agreement also includes funding increases to improve medical care for military veterans.
Work requirement changes for food stamps, other aid
The final holdup before Biden and McCarthy secured a deal was a fight over expanded work requirements for welfare programs, which Republicans pushed and the White House resisted.
The final agreement overhauls the Supplemental Nutrition Assistance Program by setting time limits for how long able-bodied adults 54 years old or younger without dependent children can receive food stamps if they do not meet certain work requirements.
But in a win for the White House, the deal would expand food benefits for the homeless and veterans.
The deal contains additional work requirements for recipients of the Temporary Assistance for Needy Families program, but no changes to Medicaid, which Biden said he would not support.
Claws back some IRS funding
In another concession to Republicans, the deal rolls back $10 billion of $80 billion in IRS funding approved in Biden's Inflation Reduction Act last year that was designed to crack down on wealthy Americans and corporations that evade taxes.
The additional funding for the IRS has long been an attack line for Republicans in Congress who have warned of 87,000 new IRS auditors and regulators prying into the lives of hard-working Americans.
The money is meant to modernize a tax collection agency plagued with understaffing in an effort to crack down on wealth tax cheats.
The tax gap – the difference between the amount of taxes owed and what is actually collected – has jumped considerably, from $441 billion per year between 2011 and 2013 to $584 billion in 2019. Over the next decade, it’s estimated to hit $7 trillion.
Rescinds unspent COVID-19 rescue money
Delivering on another Republican rallying cry, the deal would claw back billions in unspent COVID-19 relief funding that was approved by Congress during the Biden and Trump presidencies.
A memo circulated by House Republican leadership said the rollbacks include slashing $400 million from the Centers for Disease Control and Prevention's "Global Health Fund."
Public health advocates have expressed concerns that rescinding funds will hurt efforts to prepare for the next virus and take money away from a persistently underfunded public health system. House Democrats said money is still needed to keep the Strategic National Stockpile full of essential medical supplies.
A Democratic source familiar with the negotiations said Biden's priority with COVID-19 funds was to "protect public health money, which we were able to do."
No taxes on wealthy or corporations
Biden hoped to limit spending cuts with increased revenue by rolling back former President Donald Trump's 2017 tax cuts for the wealthiest Americans and corporations and ending tax loopholes used by the super wealthy.
But the deal reached with McCarthy doesn't address taxes at all.
With the tax system untouched, Biden is likely to make his call for wealthy Americans to "pay their fair share" in taxes a centerpiece of his reelection campaign.
Inflation Reduction Act, student loan forgiveness left intact
The White House succeeded in keeping intact the Inflation Reduction Act − the president's signature climate and prescription drug bill − and the president's program to forgive student loan debt for millions of Americans.
Republicans proposed eliminating both in legislation that the GOP-controlled House passed last month.
The most significant change on student loans would be requiring borrowers, who have been granted pauses from their monthly payments during the pandemic, to begin paying back the government. The change would effectively codify Biden's plan to restart payments after the Supreme Court takes up his student loan forgiveness program.
Reach Joey Garrison on Twitter @joeygarrison.
This article originally appeared on USA TODAY: Debt ceiling deal details: What's in Biden's, McCarthy's agreement?