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Day 861

1/ Biden and Kevin McCarthy reached an agreement in principle to lift the debt limit and prevent a default on the federal debt. The plan suspends the borrowing limit for two years, caps federal discretionary spending increases at 1%, while defense spending increases would be limited to about 3.5%, as proposed in Biden’s budget. The legislation also includes new work requirements for select social safety net programs, claws back unspent Covid-19 relief funds, reduces IRS funding, reallocates funds from the Inflation Reduction Act, and streamlines the process of issuing federal permits for energy projects. As part of a debt ceiling agreement, the freeze on federal student loan repayments will end at the end of the summer, which is when the Education Department had been preparing to restart payments. To avert a default, the Fiscal Responsibility Act needs be approved by both the House and the Senate and then signed by Biden before the Treasury Department’s June 5 deadline. A vote in the House is expected as soon as Wednesday night. (New York Times / NBC News / Politico / Bloomberg / Washington Post / Wall Street Journal)

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