Background Press Call on the Bipartisan Budget Agreement

Published: Mon May 29 2023

6:51 P.M. EDTMODERATOR: Good evening, everyone. And thank you for joining our background call at a bit of a short notice. As you saw, the President spoke earlier this evening, just a few minutes ago, about the bipartisan budget agreement he has reached with Speaker McCarthy. Our call is on background as “White House officials.” It will be embargoed until the end of the call. I will also be sending out a document to those who have RSVP’d for the call. Those who RSVP’d earlier should have already received it. For others, I will send it shortly after the call concludes.The document is sourced as from a “White House source.” And the call is, again, from “White House officials.” Joining us on the call, we have [White House official]. And we also have [White House official]. That is for your awareness and not for reporting. I will now turn it over to [White House official] and then [White House official] to give some brief remarks. And we will take your questions.WHITE HOUSE OFFICIAL: Thanks, [moderator]. And thanks, everybody, for hopping on at short notice. I can just do some quick context setting and then talk through appropriations and the safety net components of the deal. And then I'll hand it over to [White House official] to talk through climate and permitting issues. So just to say at the very top: You know, the deal that the President is announcing today we think is a good one. It protects the historic economic gains we've made, really allowing one of the strongest recoveries on record to continue by taking the threat of default off the table into 2025. It protects a set of historic legislative accomplishments that this President has had over the last two and a half years, from the infrastructure law to the CHIPS and Science Act, the key climate and prescription drug components of the Inflation Reduction Act, and it beats back a set of extreme demands that were part of the Limit, Save, and Grow Act. So, you know, the President has said for months that it's Congress's obligation to prevent default. But at the same time, he's also been clear that he'd welcome a separate negotiation on the budget with a Republican leadership. You know, that's just like we do as part of the appropriations process every year, and it's also what happened in 2015, 2018, and the 2019 budget deals that also carried a debt limit increase. So let me start by walking through three quick points on appropriations. You know, the first main point to make here is that this is a two-year appropriations agreement. It keeps non-defense spending roughly flat with the 2023 levels in 2024, when you factor in agreed-upon appropriations adjustments. In 2025, it increases the non-defense spending levels and the defense spending levels by 1 percent. Some of the adjustments that I referenced include repurposing on obligated emergency COVID relief, as well as repurposing some of the mandatory IRS funding. There are other adjustments agreed to as well. And beyond 2025, there are no budget caps, only non-enforceable appropriations targets that were referenced in the legislation. The second point is: You know, we really do, I think, in this deal, protect non-defense spending that helps support just a range of key programs that the American people count on, from scientific research, to Meals on Wheels, to education, and so many others. This is a - much different from the 22 percent cut to non-defense discretionary priorities and 10 years of caps that was originally laid out by House Republicans. In fact, this outcome is roughly what would have happened to non-defense spending if we hadn't had a budget agreement this year and instead had enacted a full-year continuing resolution. And I'll say that, you know, the agreed-upon levels really do reflect what the administration had successfully negotiated at the end of last calendar year, with two years already of bipartisan appropriations increases that have taken non-defense spending up over this two-year period by about 16 percent. The last point I'll make on appropriations is that, you know, critically, the deal fully funds veterans medical care, including the mandatory funding from the PACT Act’s Toxic Exposure Fund at the levels that were in the President's 2024 budget. And it also includes funding for the Defense Department at the President's budget level as well. So let me turn now to talk a little bit about how the agreement treats safety net programs. Here, the context setting is, as we've said repeatedly over the last several weeks, you know, it's important to look at what was in the Limit, Save, Grow Act on these issues. It had Medicaid cuts that would have caused millions of people to lose healthcare. SNAP cuts would have caused hundreds of thousands of people to lose food assistance. And the TANF reforms in that bill would have put critical support for nearly a million vulnerable children at risk. The President and the President's negotiating team fought hard to ensure that no one lose healthcare in this bill and that poverty wouldn't increase as part of this agreement. So with those principles in mind, let me just walk through each of those three programs in turn.The first, Medicaid: There were no changes to Medicaid in this bill. The second, on SNAP: Limit, Save, Grow proposed to expand the SNAP work requirements to people age 50 to 55; currently, they go from 18 to 49. And then during the negotiations, Republican negotiators demanded another SNAP cut that would have restricted state flexibility to waive SNAP work requirements in areas with insufficient jobs. The final agreement makes no changes to state waivers. It does, however, include the Republican proposal to phase in SNAP work requirements to people up to age 54. But at the President's insistence, it also includes changes that will actually reduce the number of vulnerable people who are subject to SNAP work requirements. And these exemptions apply to all ages 18 to 54. So these exemptions are for people who are homeless and veterans, as well as foster youth. And I'll point out that Secretary Fudge noted today that the definition of homeless in the existing SNAP statute is broad. That includes housing instability. So, you know, if you factor in both the “50 to 54” change, but also the changes for veterans, for the homeless, and for foster youth, we expect that the number of people subject to SNAP work requirements will stay roughly the same under this agreement. And that's even the case when the age change is fully phased in. I'll also say that at the President's insistence, the SNAP changes in this bill are temporary, sunsetting in 2030, which will give Congress an opportunity to reevaluate them. Finally, let me just say on TANF: The Limit, Save, Grow Act would have put assistance for nearly a million of the nation's most vulnerable children at risk by gutting flexibilities that really allows states to use their TANF resources to direct cash assistance to the families of the most vulnerable children. The President directed his team to fight hard on this issue as well, really to make sure that vulnerable children who are receiving support through TANF don't lose access to that support. And while we made a set of reforms to TANF in the final agreement, we think that those reforms are consistent with the President's principles and will, in fact, you know, maintain states’ abilities to continue to support vulnerable children and vulnerable families. So I'll pause there and turn it over to [White House official] to walk through the climate and permitting issues.WHITE HOUSE OFFICIAL: Thanks, [White House official]. Look, House Republicans came to the negotiating table with a proposal attached to a vote on paying our country's bills that represented really a broadside aimed at efforts to protect our environment and aimed at efforts to tackle the climate crisis. The House Republicans’ proposal sought changes in the law that would have allowed mining companies to store hazardous waste near communities without permits, polluting industries to skirt review under the Clean Air Act, and oil refineries to expose workers and communities to toxic chemicals. None of that is in this agreement. House Republicans sought to roll back the President's historic climate law, the Inflation Reduction Act, by taking particular aim at the tens of billions of dollars for clean energy in disadvantaged communities, rebates to retrofit homes and save money for low-income Americans, and cleanup efforts related to harmful pollutants from oil and gas that disproportionately impact fence-line communities. None of that is in this agreement.This agreement - the direct result of President Biden's leadership and commitment to environmental protection, to bold climate action - holds firm against those efforts for rollback and repeal. The President's Inflation Reduction Act, the biggest climate bill in history anywhere ever, has been protected. And we have protected the substantive environmental safeguards in the Clean Water Act, in the Clean Air Act, in the Toxic Substances Control Act, and the substantive provisions of the National Environmental Policy Act, NEPA, that sustain our people and our planet. At the same time, in bipartisan fashion and through the work of hard-earned compromise, in the context of this broader negotiation, we secured measures that will harness government efficiencies to accelerate construction projects across the country. Specifically, the agreement includes measures aimed at boosting the coordination, predictability, and certainty associated with federal agency decision-making. The agreement includes provisions to better coordinate NEPA reviews to designate a single lead agency for a single project, charged with developing a single environmental review document - not multiple ones - according to a clear and public timeline. And the agreement, importantly, makes these changes without curtailing the substantive scope of the NEPA statute. It doesn't cut down the statute of limitations, as was proposed in H.R. 1, or impose barriers to standing, or taking away injunctive relief or other judicial remedies. These changes will help us build more more quickly and responsibly; build more solar, build more wind, EV chargers, transmission, and the other infrastructure we need to secure a clean energy economy. There's a tailwind here for clean energy, and it's because of the President's leadership and the Inflation Reduction Act and the infrastructure law we're going to be better able to harness that tailwind because of these improvements to the way the government operates. That's a good thing, and that's what's in the agreement.MODERATOR: Thank you very much, [White House officials]. I will now turn it over to Zeke Miller for our first question.Q Thanks for the call. What do you estimate to be the net deficit reduction from this agreement? And then, on the IRS cuts in particular, the document that [moderator] has passed out says $10 billion in FY24, $10 billion from FY25. But isn't that sort of a complete rollback of the funding that came in from IRA for those two fiscal years? I was hoping to get a little bit more clarity there.WHITE HOUSE OFFICIAL: I'll start on the second. So, no, the $80 billion appropriation in the Inflation Reduction Act was a 10-year appropriation. So it's not as if the IRS was appropriated $10 billion for one year, $10 billion for the next, et cetera. So the CBO then estimated how much it thought the IRS would spend over that 10-year period. But it - that is, you know, 10-year money, and so the IRS will continue to be able to spend that, you know, remaining 60, and spend that over the course of the next several years.You know, on the question of what that means going forward, you know, it might be the case that, you know, in six, seven, eight years, there would be a need to come back and ask for more IRS funding, just as there was going to be a need to do that after the 10-year window anyway. So we don't think it'll fundamentally change what the IRS does over the course of the next few years. And on the second, we don't have a score yet. The discretionary savings are likely to be, you know, in the $1 trillion or higher range, but we'll have to wait for the CBO score.MODERATOR: Thanks, [White House official]. And thanks, Zeke. Now I’ll turn over to Jim Tankersley with the New York Times.Q Hi all. Thanks for this. Two questions. One, I don't see anything in here about the sort of CR enforcement mechanism. Can you tell us any more detail about sort of what happens under this agreement if Congress is unable to pass spending bills by the end of the year?And second off, can you be really specific about the IRS money? Is this coming out of enforcement? Is this coming out of modernization? Like, what is going to - you can say nothing is going to change, but it's $20 billion over two years. What will not be done that would have been done with this money?WHITE HOUSE OFFICIAL: So, on the first question, the agreement has a backstop that basically provides incentives for appropriators to pass bills. And so, specifically, what it is is that, at the end of the calendar year, if the 12 bills are not passed, then the non-defense and defense levels go to just slightly below the 2023 level.And so, you know, that would be - that's an important incentive to pass bills because, you know, there are a bunch of folks in Congress who won't want to see defense go below that 2023 level - excuse me, below the 2023 level. And then, on the second, look, you know, I think part of - part of what you'll see is that - on the IRS - is that, you know, the IRS commissioner has said, and we've noted, that, you know, because of the structure of the IRA - where the IRS funding was 10-year funding, and it's not as if you're taking 2024 or 2025 money from the IRS - we don't believe in the near term that anything will need to change. Obviously, that's something that will play out over the next year or two. And, obviously, you know, I think it's worth noting that the enforcement - every enforcement dollar that we invest in the IRS, obviously, there's a real return there to the taxpayer, and enabling that agency to crack down on tax evasion and to crack down on folks at the top of the income distribution, who are not paying what they're legally supposed to pay. So this is a - this is a big priority for the President. We think the IRS will continue to be able to effectuate its plans in the near term, and then there may be a need to come back to Congress and ask for additional funding.MODERATOR: Thanks again. I'll now turn it over to Emma Dumain at E&E.Q Hi, thanks so much for taking this question. I'm hoping that you could shed some light more on the energy provisions in the bill. We understand there's language in this deal that would apply all projects to the FAST-41 federal permitting process, as codified in the Bipartisan Infrastructure Law. We're hoping you could walk us through what effect those changes would have on projects. And also, if you could walk us through what you have in the bill dealing with transmission. We understand there might be some sort of study, but not actual policy, to better facilitate the buildup of renewables. And hoping we could get some details there. Thank you.WHITE HOUSE OFFICIAL: Thanks, Emma. First of all, the FAST-41 Act - and for, I think, 90 percent of the folks on this call probably don't know what that is, so let me just do a second on that - is a set of provisions that were made permanent in the Bipartisan Infrastructure Law that accelerate the development of environmental reviews and environmental decision-making associated with a narrow set of high-priority, large infrastructure projects. This agreement represents a change to how environmental reviews are developed through better coordination, better efficiency, across the board, regardless of the size of the project or the industry from which it comes. So in that sense, it's different. The second thing that's different here is the set of changes. FAST Act involves a very particular set of definitions, as well as dashboarding responsibilities. The changes here, while there is some overlap in the elements that are proposed, like a single lead agency and a single document, are distinct from both the - sort of, call it the “infrastructure” of the government that implements this, and so on. So I really - maybe to the core premise here of whether this is importing or transferring the FAST Act from, you know, a few projects to others is probably not the right way to think about it. FAST Act is a thing; this is a different thing. The overlap being they both focus on efficiency associated with project development. But, for example, you know, FAST Act includes timelines around records of decision here. We're talking about the development of environmental review. So those are - I don't want to get way in the weeds on it, but they're pretty distinct. And so, I wouldn't think of them as one necessarily flowing into the other. One of the very relevant things that is in here is deadlines around the development of an environmental review. So for less environmentally complex projects, the deadline here is a year. And for more environmentally complex projects, the deadline here is two years for the agency to study and then put together a statement of how the project impacts the environment. That's going to be really helpful in the buildout of transmission lines. Just to give you a few examples: The TransWest Express - which is going to bring three gigawatts of transmission capacity, wind energy into the West - took six years to go through that environmental review process. Energy Gateway South, another transmission project: 1,500 megawatts took five and a half years. Southline Transmission, four years. And you see that pattern play out in solar projects that have taken five years or six years to get through environmental review. Some of these offshore wind projects that actually are going to come online this summer have taken around three years to get through the process. So this is going to be an accelerant in the buildout of those projects. That's thing number one. Thing number two is: We're making it easier for complementary parts of clean energy - for example, electric charger stations being installed - to have more efficient reviews. So if one agency develops a categorical exclusion for EV chargers, another agency can now borrow it. That's actually an element that was included in a recent bill in the Senate by two Democratic sponsors, Senator Carper and Senator Schatz, that's borrowed in here and included in the agreement. Finally, there is - there are elements in here that motivate additional focus by the federal government to study the ways in which building out transmission not only accelerates us on clean energy, but also accelerates the hardening and resilience and reliability of our grid. That's why the President has made transmission such a priority - not because it only is the vehicle to a cleaner energy future, but also because it's the vehicle to a more affordable and more reliable and resilient energy future. This agreement recognizes the importance of that and directs the Federal Energy Regulatory Commission to get after that incredible opportunity.MODERATOR: Thank you so much. Now we'll turn it over to Trevor Hunnicutt of Reuters.Q Thanks for taking the question. My question is just about the administrative PAYGO aspect of this. You know, understand that it provides waiver authority for the OMB director and protections against judicial review. Just curious how exactly that would work. Does that mean that the OMB director can just, you know, kind of broadly claim that an exception or a waiver is needed if that - Congress and courts can't look at that and overrule that? How would that work? Thanks. WHITE HOUSE OFFICIAL: I can start. Yes, that's what it - that's what it means. You know, it is a very broad waiver authority. And you'll be able to see that in the legislative text. And the only other thing I would add: In addition to that waiver authority, in addition to that protection to judicial review, that provision actually sunsets after two years. So it's - you know, this will be a waiver authority that the Biden administration's OMB director will have for the next two years, and then that provision will sunset.MODERATOR: All right, for our next question I’m going to go to Jeff Stein. Q Hey, guys. Thanks again for doing this. I wanted to drill down on something you guys said earlier about the NDD. Obviously, Republicans have been saying that there's a substantial cut here, and then the White House has been saying that it's really something like a freeze. And I wanted to sort of be specific here. Like, are you maintaining that the NDD level will be flat? And if it's not, is it 1 percent, 2 percent? And sort of what do you say to Democratic critics who say, by ‘25, with only a 1 percent growth, that that will be a pretty big, you know, cut in real terms, but, you know, factoring in two years of inflation? So that's the two-part question. Thank you.WHITE HOUSE OFFICIAL: Sure. So, on the first part of your question, it's flat. It's a difference of about $1 billion. So the non-defense, outside of veterans, is at 637 versus 638 in 2023.On your point about real versus nominal and only 1 percent increase in 2025, I'd say, you know, it does follow a period where we have a - we've had a real increase of around 4 or 5 percent over the last two years. And, you know, this reflects the fact that we are in a divided government where we were obviously going to fight it - fight hard for higher non-defense funding for a range of priorities that are critical to the President's economic and broad agenda. We will continue to do that. But, you know, in a divided government, we're not going to get the kinds of NDD increases that we would hope to get. And so, this will be - this will continue to be a priority for us going forward - you know, going into the rest of the term and hopefully in the President's second term.MODERATOR: Thanks again. I’ll turn it over to Elizabeth Schulze with ABC.Q Thanks so much. I know that we are talking about the budget agreement, but I was just wondering if you could shed any more light on the exact timing. We're talking about the debt limit extension. Is this a suspension until January 1st, 2025? Is it a dollar amount? Can you just explain that a little bit to us,if possible?WHITE HOUSE OFFICIAL: Sure. It's a suspension through January 1st, 2025. And then, as you all know, the Secretary of the Treasury can then employ extraordinary measures. So this would get - this gets us, you know, into 2025. And we think that, you know, taking the threat of default off the table into 2025 is, you know, a significant upside for the economy, a significant accomplishment. You know, I think we've had this strong economic recovery - you know, one of the lowest unemployment - the lowest unemployment rate in 50 years. This really - I think when you talk to business leaders, when you talk to economists, others, this really was, I think, one of the biggest threats to the economic outlook. And, you know, the President is quite pleased that if Congress passes this legislation, we will have removed that threat for the next two or so years.MODERATOR: I'll now turn it over for our last question to Jennifer Haberkorn of Politico.Q Hi. Would you explain the TANF changes included in this bill? And do you have an estimate as to how many people those policies and the new SNAP policies would impact? Thank you.WHITE HOUSE OFFICIA: So let me just say, you know, as I mentioned on SNAP, you know, we'll have to wait to get additional estimates, but - from CBO and others. But our view and our estimate is that when you factor in the range of policies, both the age policy and the reduction in work requirements for veterans and the homeless and foster youth, that roughly the same amount of people will be covered by work requirements before and after this deal. On TANF, obviously - so, TANF is more complicated. So if - just allow me to do a second of background here. So, under current law, states have to meet work participation rates for TANF cash assistance recipients. The designated rate in the statute is 50 percent of TANF cash assistance recipients must be working. But states are able to reduce that 50 percent based on how much a state's caseload has fallen since 2005. TANF caseloads have, in fact, fallen significantly since 2005. And so, many states are - many states have a lower work participation rate than 50 percent required, and that really allows states the flexibility to serve, you know, what really is a population of vulnerable, low-income children, even if their parents or their parent isn't working. So the McCarthy bill - the Limit, Save, Grow Act - would have amended the base year, made that 2022 instead of 2005. And so what that would have done is made the work participation rate in every state just about 50 percent. According to a range of experts, not just our administration but outside, you know, those changes would have really led many, many states to divert their TANF dollars away from cash assistance and into other purposes, because it just would have been too difficult to meet that new standard. And so what the deal that the President announced today does is instead of amending the base year to 2015, it - to 2005, excuse me - it amends the base year to 2015. It also gives states additional time, two years, to implement this policy and continues to allow states to do things like spending additional TANF dollars and in exchange being able to get a lower work participation rate because of that. And so, together, the range of changes, we think, would have much, much less severe consequences than the McCarthy bill, and, you know, we really believe will allow states to maintain providing support to vulnerable children because these flexibilities will be left in place.MODERATOR: Thank you so much, [White House official]. And I know there are a few people with their hands up. If you have questions, you should feel free to email me, and I will sort that out. Just a quick few policy - or housekeeping items. This call is, of course, on background as “White House officials.” The PDF that we sent can be attributed to from a “White House source.” We will be sending out a transcript of this call as soon as it is available. And the call’s embargo lifts now.Thank you, everyone. Have an enjoyable evening. And enjoy “Succession.”7:21 P.M. EDT The post Background Press Call on the Bipartisan Budget Agreement appeared first on The White House.

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