Debt Limitation Act creates ‘huge’ stakes for 2024 election with deadlines for defaults, Obamacare and Trump tax cuts

WASHINGTON — The recently enacted debt ceiling law all but guarantees that the winner of the 2024 presidential election and the next Congress will face another potentially calamitous default deadline soon after taking office.

The measure signed by President Joe Biden over the weekend suspends the debt ceiling until Jan. 1, 2025, with a few more months for the Treasury Department to use “extraordinary measures” to pay the bills.

It’s not just the debt ceiling, which is more likely to be controversial if Biden is re-elected. The party that controls Congress and the White House will set the agenda on the consequential issues that will shape the next decade of tax, spending and health care policy in the first year of the new term. The new debt limit law also includes a two-year budget deal that expires in 2025. In addition, enhanced Obamacare grants and the bulk of the 2017 Republican tax cuts named for former President Donald Trump will also expire at the end of 2025.

Rep. Brendan Boyle, D-Pa., a senior member of the House Budget Committee, told NBC News that the consequences of the upcoming election are “incredible.”

“The stakes in the 2024 election are huge, not just for our democracy, but for domestic politics. So many major laws over the past few years expire in 2025,” said Boyle, who is expected to be chairman of the committee. House budget if Democrats take control of the House “Thus, the winners of the next election will have the ability to shape policy for the rest of the decade.”

Enhanced subsidies for people who buy health insurance under the Affordable Care Act, passed by Democrats in a party vote under the Cut Inflation Act, expire at the end of 2025, creating a high-stakes moment for Obama’s legislative signing. -Biden administration. The impact will be felt by the estimated millions of Americans who have gained coverage through the improved subsidies.

And the sweeping Republican tax bill Trump signed will expire after 2025. The law’s corporate tax cuts have become permanent, but his income tax cuts for individuals from all walks of life are about to disappear. . Its $10,000 cap on state and local tax deduction (known as SALT) will also be lifted and reset to unlimited.

“It’s hard to overstate how important the 2024 election will be,” said Rep. Dusty Johnson, RS.D., chairman of the center-right Main Street Caucus. “We have a number of major policy questions that go to help set a trajectory for our country over what the next 10 years are likely to be.”

“Listen, 2024 is big, big, big,” he said.

The dynamics of the next debt ceiling deadline will depend on who wins the 2024 election. If Biden wins re-election and Republicans retain control of the House, it could trigger a repeat of the recent showdown over whether to pay the bills. country bills or default.

Rep. Richard Neal, D-Mass., a senior member of the powerful Ways and Means Committee, said Democrats would make it a “priority” to expand ACA grants and seek “a fairer version “Trump’s tax cuts, which means ending them for top earners.

Obamacare and the Trump tax law were passed along a party line as part of the “reconciliation” process, which can escape Senate filibuster but requires deficit-increasing policies to die out. Biden is personally invested in ACA money, just as Trump, the GOP frontrunner in the 2024 polls, is personally invested in his tax bill.

“There are a lot of contentious issues that still need to be resolved,” Neal said. “I think for the election cycle, that means those concerns are paramount.”

A Republican-controlled Washington would be less inclined to renew ACA funding — and more inclined to extend GOP tax cuts, perhaps with some tweaking.

“Obviously there is a lot of support for them. Obviously they’ve helped the US economy grow,” Johnson said of the 2017 tax cuts. “But that doesn’t mean the policy can’t be changed in some way. of another.”

Former Capitol Hill political aides say it’s hard to know how the issues will play out without knowing who will take control of the White House and both houses of Congress next fall.

“2025 is shaping up to be a big year for economic policy. Certainly the political stakes of the 2024 election will make the choices clear,” said Charlie Ellsworth, a former legislative aide who worked on the budget and appropriations for Senate Democratic Leader Chuck Schumer, DN.Y. “How this manifests in congressional action is really hard to say until we see the results.”

Brian Riedl, who served as chief economist for the then senator. Rob Portman, R-Ohio, said 2025 “will bring extraordinarily important tax and spending negotiations.”

“Paradoxically, the number of policies requiring attention – expiring tax cuts, spending caps and health policies – can actually facilitate negotiations by giving each party a stake in the outcome, and a wide range of policies to arbitrate against each other,” said Riedl, now a fellow at the right-leaning Manhattan Institute.

“And above that debate,” Riedl added, “will be the impending insolvency of the Social Security and Medicare trust funds, expected a few years later.”

This article originally appeared on NBCNews.com

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