WASHINGTON – WASHINGTON – Key negotiators reached an agreement in principal Saturday night to raise the debt ceiling, averting a disastrous default just days before Treasury Department officials say the U.S. may run out of cash, said Speaker Kevin McCarthy on Saturday.
The deal — which is expected to raise the country’s borrowing authority in exchange for cuts to spending — still has to be converted into legislative language and pass both the Republican-led House and Democratic-controlled Senate. The deal comes after weeks of negotiations between President Joe Biden, Speaker Kevin McCarthy and the GOP. They demanded that the country continue to pay its bills in exchange for spending cuts.
McCarthy tweeted on Saturday: “We have reached an agreement that is in the best interests of Americans.”
McCarthy said to reporters outside his Capitol Office that “we still have work to do tonight” to finish the entire writing. He added that he expected to post the text Sunday and hold a House voting on it on Wednesday.
He said he will speak with Biden again Sunday.
Sources familiar with the deal said that it included a deal on two-year funding and a debt limit extension of two years, effectively resolving this issue until the election in 2024. The agreement will include work requirements for federal assistance like SNAP, for Americans aged up to 54. Homeless people and veterans are exempted.
By averting this crisis, the White House will avoid a first ever default, which threatens to destroy millions of American jobs and wreck the American economy. This will shake the faith that people have in Biden and his leadership, as well as the divided Congress, when he begins a reelection campaign.
Biden and McCarthy spoke for an hour-and-a-half on Saturday night. It was a rare, one-on-one discussion between the two leaders after days of tense discussions over the last sticking points.
On Saturday, top Republicans were in and out the speaker’s room as negotiations continued. Some of the discussions took place by phone and virtually. Shalanda young, a White House negotiator, was in Louisiana for graduation remarks at Xavier University. She joked that the two-hour lunch break was the “most fun I’ve ever had in two weeks.”
Late Friday, Republican leaders started preparing to present a bill at the GOP conference. However, a deal was still not in reach.
Conservatives who were critical of the Republican leadership threatened to block the bill if Speaker Boehner struck a deal that did not reduce spending. One outside advisor warned of “trench war” to come.
McCarthy said recently that he would give his members 72 hours before a vote to review the text. Mike Lee, R. Utah, has warned that he will block a quick vote in the Senate, if he’s not satisfied with the terms. This could mean it takes days before the chamber can jump through the procedural hoops.
The extension of the debt ceiling does not authorize future spending; it allows the U.S. government to pay off existing debts that have been accumulated by both parties over the years, through increased spending on domestic programs and military programs as well as reduced taxes.
McCarthy’s and the White House’s negotiation staff held back-toback sessions of negotiations, with some sessions lasting late into the evening before they were resumed. The Republican effort to add work requirements into social safety net programs was an obstacle right up until the end.
When a deal was finally announced on Saturday, Democratic anger had been reduced to a simmer. Biden’s lack of presence in the negotiations had caused some Democrats to be concerned that the president would cede the message war to Republicans.
The calls for Biden, who holds the office of vice president, to use his bully pulpit to convince voters to support a bill that makes deep concessions next year reached a fever pitch. Vice President Kamala Harris had kept a low-profile, too. She had joined the public talks one week before, but then led a Zoom call that was a mess.
As the anxiety grew, Biden was urged to not abandon options for tackling the debt unilaterally like the fourteenth Amendment.
Karine Jean-Pierre, White House Press Secretary, said: “The only way to move forward is for Congressmen to perform their duties without conditions.”
Wally Adeyemo, the Deputy Treasury Secretary, said it was not possible on Friday with .
Treasury Secretary Janet Yellen gave a deadline of June 5, when it was expected that the government would exceed the debt ceiling, increasing pressure in the last days.
