After a long Memorial Day weekend, the White House and Republican negotiators have crafted a plan to raise the debt ceiling. But what exactly is in it, and which side came out on top?

The plan, which was agreed to by President Joe Biden and House Speaker Kevin McCarthy (R-CA), was announced on Saturday night, and the details began to emerge shortly afterward. Both sides are touting it as a win, although both have members of their parties condemning the deal. Biden had tried to get an agreement with little changes to spending, while McCarthy used the opportunity to try to extract big spending concessions.

ALL EYES ON SWING VOTE MASSIE AS HOUSE PANEL TAKES UP DEBT CEILING BILL

The reality of the deal is somewhere between the aspirations of the two men — an agreement they hope will garner enough support from rank-and-file members to pass and become law.

What does the deal do?

The United States has been forced into periodic negotiations over the debt ceiling for a long time, and this bill once again sets up another confrontation in a few years.

The U.S. had previously hit its $31.4 trillion debt limit in January. This legislation doesn’t raise the debt ceiling again but rather suspends it until after the next election cycle next year. The suspension will allow the Treasury Department to keep borrowing money to pay the country’s bills until January 2025, when the agreement ends.

This is different than a plan that Republicans had initially put forward that would have raised the debt ceiling over the next year either by $1.5 trillion or until March 31, 2024, whichever came first.

What did Republicans get out of it?

Republicans scored some wins in the negotiations, and McCarthy has been touting the agreement as a victory for his side. The top line is that the bill cuts nondefense discretionary spending next year and only allows a 1% increase for the next six years.

Discretionary spending includes federal rental assistance, grants for schools in low-income communities, research funding, and domestic law enforcement. It doesn't include mandatory spending for programs such as Social Security and health programs, which comprise about 70% of total federal spending.

McCarthy published an op-ed in the Wall Street Journal calling the plan to limit discretionary spending a “historical and foundational change.”

“No other debt-limit increase in the past decade has reduced overall spending, reduced nondefense spending and reduced the deficit. The Fiscal Responsibility Act is true, transformative spending reform,” he said, referring to the legislative name for the deal.

But some conservatives are opposed

But not all Republicans are on board.

Some contend the deal doesn’t go far enough to cut into the deficit and right the country’s fiscal ship, which has been taking on water for years.

So far, more than a dozen House Republicans have voiced opposition to the agreement. Rep. Nancy Mace (R-SC) tweeted that she would vote against the proposal. She said the deal “normalizes record high spending started during the pandemic” and took issue with the fact that it simply suspends the debt limit and doesn’t establish a firm cap.

“Washington is broken. Republicans got outsmarted by a President who can’t find his pants,” Mace tweeted. “I’m voting NO on the debt ceiling debacle because playing the DC game isn’t worth selling out our kids and grandkids.”

THE NEXT STEPS

The first major test isn’t just garnering enough support from rank-and-file members but is a procedural one in the House Rules Committee, which decides which bills to schedule for consideration on the floor. The committee has nine Republicans and four Democrats, meaning that if all four Democrats opposed bringing the bill to a vote on the floor, just three Republicans could join Democrats and cause GOP leadership serious trouble.

Two of the four Republicans, Reps. Chip Roy (R-TX) and Ralph Norman (R-SC), have already signaled opposition to the agreement.

“This is a horrible deal,” Norman told the Washington Examiner. “The American people do not deserve this at all.”

Rep. Thomas Massie (R-KY), who is known for being a staunch fiscal conservative, is also on the committee and has not yet revealed where he stands. The committee is set to meet Tuesday afternoon to discuss the plan.

What about the pipeline?

Included in the legislation is also a provision seemingly unrelated to the debt limit itself — the expedited completion of the Mountain Valley Pipeline, which is viewed as a major victory for West Virginia’s lawmakers, including centrist Sen. Joe Manchin (D-WV).

The inclusion has elicited blowback from some Democratic lawmakers who are hoping to cut down the country’s fossil fuel consumption. In fact, Sen. Tim Kaine (D-VA) announced he plans to file an amendment revoking federal permits for the project from the legislation.

A spokesperson said Kaine is “extremely disappointed by the provision of the bill to greenlight the controversial Mountain Valley Pipeline in Virginia, bypassing the normal judicial and administrative review process every other energy project has to go through.”

Work requirements

Also in the agreement are beefed-up work requirements for the Supplemental Nutrition Assistance Program, better known as food stamps, which already have some work requirements.

Right now, those who are “capable” and aged 18-49 without dependents must report work. The new plan would increase the age limit to 54 — still down from the GOP’s original plan to raise that limit to 56.

Those in the 18-49 cohort who can’t show they are employed at least 20 hours a week would be limited to only three months of food stamps in a three-year period.

House Republicans had initially wanted to require Medicaid beneficiaries to work 80 hours per month (20 hours per week), but Biden succeeded in blocking that measure.

The addition of beefed-up work requirements will cause the plan to lose some support from Democrats.

So is default a concern anymore?

Yes, it is. Just because the plan has been agreed to by Biden and McCarthy, it still needs to be passed by both chambers of Congress before the "X-date," which is the projected point when the Treasury will exhaust its ability to pay incoming bills on time and in full.

The "X-date" is a moving target, and no one is really sure when it will exactly occur. For weeks, the Treasury Department assessed that it could run out of cash as soon as June 1 (this Thursday), but on Friday, Treasury Secretary Janet Yellen clarified that the date is likely to be June 5 — still less than a week from now.

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Again, the Rules Committee could cause hiccups for the deal if Republicans join with Democrats in preventing the bill from hitting the floor. The closer the U.S. inches toward the "X-date," the more economic peril the country could be in.

During the last-worst standoff in 2011, the S&P 500 lost about 17% of its total value, and the U.S. suffered its first-ever credit downgrade. Stocks were mixed but generally flat on Tuesday as investors digested the developments on Capitol Hill. But if it appears that there is a growing wave of resistance to the plan, things could get dicey on Wall Street.