Take a deep breath – the United States can continue to pay its debts now that the issue of raising the debt limit has been resolved until at least January 2025. While it would be ideal if Congress found a way to eliminate this issue permanently, for now, we need to understand the provisions included in the recent act.
What You Need to Know About the Act
- The debt limit is suspended until January 2025.
- Military spending will increase by about 3% in 2024, and there will be funding to improve medical care for military veterans, including a $20.3 billion fund for veterans who have been exposed to toxic substances or environmental hazards. Non-defense spending levels are flat this year and can be raised by 1% in 2025.
- The act includes new work requirements for able-bodied, low-income Americans ages 50-54 who receive food assistance under the Supplemental Nutrition Assistance Program. Certain exceptions are included for homeless people and veterans.
- Student loans are no longer frozen for COVID-19, but President Joseph Biden’s efforts to forgive between $10,000 and $20,000 in student loan debt for most borrowers aren’t affected. Payments are set to resume no later than Aug. 29, 2023.
- There are new measures aimed at getting energy projects approved more quickly, plus much more.
What’s Not in the Act
- Changes to Social Security or Medicare.
- New taxes on corporations or wealthy individuals.
- Steps to reduce Medicare spending on prescription drugs.
- Changes to the Inflation Reduction Act’s clean energy and climate provisions.
To understand how these provisions might affect you, it’s best to work with a financial professional.