President Joe Biden and House Speaker Kevin McCarthy have reached an agreement in principle on legislation to increase the nation’s borrowing authority and avoid a default.

Negotiators are now racing to finalize the bill’s text. McCarthy said the House will vote on the legislation on Wednesday, giving the Senate time to consider it ahead of the June 5 deadline to avoid a possible default.

While many details are unknown, both sides will be able to point to some victories. But some conservatives expressed early concerns that the deal doesn’t cut future deficits enough, while Democrats have been worried about proposed changes to work requirements in programs such as food stamps.

A look at what’s in and out of the deal, based on what’s known so far:

TWO-YEAR DEBT INCREASE, SPENDING LIMITS

The agreement would keep non-defense spending roughly flat in the 2024 fiscal year and increase it by 1% the following year, as well as provide for a two-year debt-limit increase — past the next presidential election in 2024. That's according to a source familiar with the deal who provided details on the condition of anonymity.

VETERANS CARE

The agreement will fully fund medical care for veterans at the levels included in Biden's proposed 2024 budget blueprint, including for a fund dedicated to veterans who have been exposed to toxic substances or environmental hazards. Biden sought $20.3 billion for the toxic exposure fund in his budget.

WORK REQUIREMENTS

Republicans had proposed boosting work requirements for able-bodied adults without dependents in certain government assistance programs. They said it would bring more people into the workforce, who would then pay taxes and help shore up key entitlement programs, namely Social Security and Medicare.

Democrats had roundly criticized the proposed changes, saying they would lead to fewer people able to afford food or health care without actually increasing job participation.

House Republicans had passed legislation that would create new work requirements for some Medicaid recipients, but that was left out of the final agreement.

Also read: Biden, McCarthy have tentative US debt ceiling deal

However, the agreement would expand some work requirements for the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps. The agreement would raise the age for existing work requirements from 49 to 54, similar to the Republican proposal, but those changes would expire in 2030. And the White House said it would at the same time reduce the number of vulnerable people at all ages who are subject to the requirements

SPEEDING UP ENERGY PROJECTS

The deal puts in place changes in the the National Environmental Policy Act that will designate “a single lead agency” to develop environmental reviews, in hopes of streamlining the process.

WHAT WAS LEFT OUT

Republicans had sought to repeal Biden's efforts to waive $10,000 to $20,000 in debt for nearly all borrowers who took out student loans. But the provision was a nonstarter for Democrats. The budget agreement keeps Biden's student loan relief in place, though the Supreme Court will have the ultimate say on the matter.

The Supreme Court is dominated 6-3 by conservatives, and those justices’ questions in oral arguments showed skepticism about the legality of Biden’s student loans plan. A decision is expected before the end of June.

(Edited by : Pradeep John)