Biden and the GOP reached a debt ceiling deal, and now Congress must approve it to prevent a catastrophic default

House Speaker Kevin McCarthy, R-Calif., speaks to reporters about debt ceiling negotiations in the Statue Hall of the U.S. Capitol, Wednesday, May 24, 2023.

Tom Williams | CQ-Roll Call, Inc. | Good pictures

An “agreement in principle” between President Joe Biden and House Speaker Kevin McCarthy would raise the nation’s statutory debt ceiling, but Congress now has just days to approve a package of spending cuts.

The compromise, announced late Saturday, risks angering both Democratic and Republican lawmakers as they begin to unravel the concessions. Negotiators agreed to some Republican demands for increased work requirements for food stamp recipients, which House Democrats called nonstarters. But negotiators stopped short of the across-the-board spending cuts Republicans wanted.

Congressional approval will be needed before the government begins paying back US debt on June 5. Lawmakers are not expected to return to work since the Memorial Day weekend before Tuesday, and McCarthy has promised lawmakers to post any bill 72 hours before voting.

White House officials planned to brief House Democrats in a video call on Sunday.

The Democratic leader and the Republican speaker reached an agreement after the two spoke on the phone Saturday evening. The nation and the world are looking for a solution to a political conflict that threatens the US and global economies.

“The deal represents a compromise that means not everyone gets what they want,” Biden said in a statement. “That’s the responsibility of governing.”

Biden said the deal “is good news for the American people because it averts what could have been a catastrophic default and an economic recession that would have led to a disaster in retirement accounts and millions of lost jobs.”

See also  Sen. McConnell's medical episodes show no evidence of a stroke or seizure, but questions remain

“We still have a lot of work to do,” McCarthy said in brief remarks at the Capitol.

But he added: “I believe this is a deal that the American people deserve.”

A legislative package, along with the outlines of a deal, could be drafted and shared with lawmakers in time for a House vote as soon as Wednesday, then in the Senate next week.

The centerpiece of the compromise is a two-year budget deal that would keep spending flat through 2024 and raise the debt ceiling by 1% for two years in exchange for two years of 2025 increases that would push the volatile political issue past the next presidential election.

Pushing hard for a deal to impose tougher work requirements on government aid recipients, Republicans achieved some but not all they wanted. The deal would raise the current work requirement age for able-bodied adults without children from 49 to 54. Biden was able to get discounts for veterans and the homeless.

The two sides reached an ambitious change in federal permitting to facilitate the development of energy projects. Instead, the deal would make changes to the National Environmental Policy Act that would designate a “single lead agency” to conduct environmental reviews in hopes of streamlining the process.

The deal came together after Treasury Secretary Janet Yellen told Congress that the U.S. could not repay its debt obligations by June 5 if lawmakers did not act on time. Raising the nation’s debt ceiling to $31 trillion now allows it to borrow more to pay the nation’s already unpaid bills.

See also  Heat versus. 76S Score: Live NBA Playoff Updates aims to take a 3-0 lead against host Philadelphia, Miami

McCarthy commands only a slim Republican majority in the House, where hard-right conservatives can sufficiently oppose any deal while trying to cut spending. By compromising with Democrats for votes, he could lose the support of his own rank and file, setting up a life-challenging moment for the new speaker.

Both sides have suggested that one of the main sticking points is a GOP effort to expand work requirements for recipients of food stamps and other federal assistance programs, a longtime Republican goal that Democrats have fiercely opposed. The White House called the Republican proposals “cruel and senseless.”

Biden has said work requirements for Medicaid would be a non-starter. Despite objections from rank-and-file Democrats, he appeared willing to negotiate changes to food stamps, now known as the Supplemental Nutrition Assistance Program, or SNAP.

Americans and the world watched uneasily as the deal threatened to destabilize the US and global economy and undermine global confidence in the country’s leadership.

Anxious retirees and others were already making contingency plans for missed checks and the next Social Security payments next week.

Yellen said failure to act by the new date would “cause severe hardship to American families, harm our global leadership position and raise questions about our ability to protect our national security interests.”

Leave a Reply

Your email address will not be published. Required fields are marked *