Biden, McCarthy finalize deal to raise U.S. debt limit and avoid default

With a few days to go until the first government default, US President Joe Biden and Speaker of the House Kevin McCarthy reached a final agreement on Sunday on a deal to raise the national debt ceiling and work to ensure enough Republican and Democratic votes to pass the measure by the end of the week. arrive.

The Democratic president and the Republican speaker talked to each other Sunday afternoon as negotiators hurriedly drafted the text of the bill so that lawmakers could review a compromise that neither the right nor the left supported. However, leaders are working hard to rally support from the political center as Congress rushes to vote before June 5 to avert damaging federal standards.

“Good news,” Biden announced Sunday afternoon at the White House.

“The agreement averted the worst crisis, by default, for the first time in the history of our country,” he said. “Take the threat of catastrophic failure off the table.”

The President called on both parties in Congress to move quickly. “The speaker and I have made it clear from the beginning that the only way forward is bipartisan agreement,” he said.

The compromise announced late Saturday includes spending cuts but risks angering some lawmakers when they see the concessions. Biden told reporters at the White House on his return from Delaware that he was confident the plan would make it to his desk.

McCarthy was also confident in his comments at the Capitol: “At the end of the day, people can look together to get through this.”

The key vote appears

The coming days will determine whether Washington can once again avoid defaulting on US debt, as it has done many times before, or whether the global economy faces a potential crisis.

In the United States, a default could freeze financial markets and lead to an international financial crisis. Analysts say millions of jobs will be lost, debt and unemployment rates will jump, and a stock market crash could wipe out trillions of dollars in household wealth. All of that would destroy the US$24 trillion market for Treasury debt.

McCarthy and his negotiators portrayed the deal as a deliverable for Republicans, even without the spending cuts they wanted. Top White House officials briefed Democratic lawmakers and immediately called some to try to shore up their support.

As Sunday dragged on, negotiators worked hard to draft the bill’s text and lawmakers asked questions.

McCarthy told reporters at the Capitol on Sunday that the agreement “didn’t get us everything everyone wanted,” but it was what they wanted in a divided government. Privately, he told lawmakers on a conference call that Democrats “didn’t get anything” they wanted.

A White House statement from the president, issued after Biden and McCarthy spoke by phone on Saturday afternoon and an agreement in principle was reached, said the deal “avoided what could have been a catastrophic outcome.”

Bipartisan support will be needed to get congressional approval before the June 5 government default on the US debt. Lawmakers are not expected to return to work from the Memorial Day weekend until Tuesday, at the earliest, and McCarthy has promised lawmakers they will abide by the rule of submitting any bill within 72 hours of a vote.

---

Negotiators agreed to some Republican demands for increased work requirements for food stamp recipients that House Democrats have called a nonstarter.

With the outline of the agreement in place, the legislative package can be drafted and shared with members of parliament in time for the House votes as soon as Wednesday, and later in the week to come to the Senate.

The core of the compromise is a two-year budget deal that will essentially keep spending on average for 2024, while increasing it for defense and veterans, and capping increases at 1% for 2025. It also increases the debt limit for two years, pushing volatility. political issues through the next presidential election.

Driving hard to impose difficult work requirements for government aid recipients, Republicans got some of what they wanted. It ensures that people ages 49 to 54 with food stamp assistance must meet work requirements if they are healthy and without dependents. Biden could secure waivers for veterans and the homeless.

The agreement makes changes to the National Environmental Policy Act that designate a “single agent” to develop environmental reviews, in hopes of speeding up the process.

It halted some funding to hire new Internal Revenue Service agents as requested by Republicans, and canceled about $30 billion for coronavirus relief, keeping $5 billion for developing the next generation of COVID-19 vaccines.

McCarthy commands only a slim Republican majority in the House, where right-wing conservatives can reject any deal that is insufficient while trying to cut spending. By compromising with the Democrats, they will lose the support of their own members, setting up a career-challenging time for the new speaker.

House Democratic Leader Hakeem Jeffries of New York said on CBS Facing the Nation he expects there will be Democratic support but declined to give numbers. Asked if he could guarantee it wouldn’t become a default, he said, “Yes.”