Two people who are familiar with the agreement say that White House and Republican congressional negotiators reached a principled agreement to avoid a default on debt. They must now get the agreement to Joe Biden in time.
Hill leaders are now racing to draft and pass a deal as quickly and efficiently as possible – through the House and Senate – before the deadline of June 5. McCarthy said that he expects the bill text to be finalized on Sunday, and the House will vote on the legislation by Wednesday.
Both Biden and Speaker Kevin McCarthy must still convince their respective parties of the agreement. This will require them to navigate fraught votes in each chamber. McCarthy announced that the two would meet again on Sunday.
McCarthy announced Saturday night that “after weeks of negotiation we have reached an agreement in principal.” “We have still more work to do today.” “To finish writing it.”
According to a source familiar with the talks, in addition to lifting the borrowing cap of $31.4 trillion through the presidential election in 2024, the agreement in principle would maintain non-defense expenditures at roughly the same level for the fiscal year beginning Oct. 1. This is far below the $130 billion cuts that Republicans originally requested in fiscal 2022.
According to a person who is familiar with the situation, non-defense spending will increase by 1% in 2025. This would be followed by several years of funding targets that are not enforceable. Republicans initially called for strict funding limitations over a 10-year period.
Biden’s budget would set defense spending at 3.5 percent above current levels. This is less than many Republican defense hawks wanted to see the Pentagon do to keep up with inflation.
According to a source who is familiar with the negotiations but was not authorized by the government to reveal details, the agreement includes policy changes for the TANF program and SNAP, including time limits up to 54 years old. The agreement would include new requirements for cash assistance recipients to work under TANF, but a modified version from the House-passed legislation. House Democrats are unlikely to like the changes.
It does not impose any new work requirements on Medicaid. This is a victory for the White House.
The agreement also protects environmental provisions of the Act for Reducing Inflation including funding for clean energy. The agreement does not touch Biden’s plan to reduce student debt.
The Republicans will need to enlist a large number of Democrats in order to pass the bill through the House. Early indications suggest that the conservative Freedom Caucus members are unlikely to back a deal which is substantially different from the bill that the House passed earlier this month.
The deal is still a major legislative piece that was negotiated by the McCarthy-led House GOP with the Biden Administration since the Republicans gained majority in January.
Biden and McCarthy spoke by phone hours before the announcement of the deal to try to resolve any remaining issues, such as the GOP’s push to include requirements for work in social safety net programs. The agreement came after days of intense negotiations between Reps. Garret Garret (R – La). Patrick McHenry, (R-N.C.), OMB director Shalanda young and Steve Ricchetti a trusted Biden advisor.
Hill leaders and White House officials still face major political obstacles. The legislative process may push Congress to the June 5, deadline when Treasury Secretary Janet Yellen warned that the country would run out of funds to pay its bills.
House GOP leaders pledged to allow their members to fully review a bill within 72 hours. Republicans have already bent this rule in the past year, but they’ve vowed not to do so again. Even allies of the leadership believe that doing so could threaten GOP support for this deal.
The GOP leadership will call the conference to brief them on the details of the agreement at 9:30 pm Saturday night. This will be followed by a major shaming operation. A person with knowledge of the plans said that House Democrats plan to call a House member at 5 pm on Sunday. Members of the House were warned that even though they left for Memorial Day on Thursday, it was possible they would have to return within 24 hours.
McCarthy’s grip on his right side, which includes members of the House Freedom Caucus, is likely to be tested by this bipartisan agreement.
The Republicans are largely united since they passed their debt proposal earlier in the month. However, the bipartisan agreement is already provoking criticism from conservatives McCarthy worked to appease before and after becoming speaker.
While the negotiators were working to close out the deal on Saturday, GOP Whip Tom Emmer and Rep. Guy Reschenthaler, a Republican from Pennsylvania, huddled with McCarthy in his office. Emmer told reporters that he had a message to the conference. He said: Do not believe anything you hear about a possible deal until you speak to us.
“Our role is to ensure that our members know that there’s no agreement. We are in constant contact with our members to let them know what’s being reported is not acceptable. Emmer stated that there was no agreement.
Members of the House Freedom Caucus circulated a graphic in the final hours of negotiations comparing provisions from the House GOP Debt Bill with what they anticipated would be included in a deal with the “swamp.”
“We could negotiate a deal’ with a Democrat House majority.” Rep. Bob Good, R-Va., said on Saturday that this was essentially what the Democrats wanted.
McCarthy must get the majority of his conference to back the deal. He said on Saturday that this would be no problem. McCarthy will also need the votes of House Democrats who, in light of the conservative revolt, have urged Biden not to bend to GOP demands to reach an agreement.
As he was under pressure from House Democrats to support his party, Biden also tried to portray himself in a way that he would be willing to fight for their priorities. Biden responded, “I don’t bend to anyone.”
The bill will still need to pass the Senate after it has cleared the House. It is estimated that it could take several days for the final vote to be held unless 100 senators agree. A fast-track is unlikely, however, after Sen. Mike Lee(R-Utah), who has vowed to “use all the procedural tools at my disposal in order to impede any debt-ceiling agreement that does not contain substantial budgetary and spending reforms.”
Sam Stein contributed reporting.
