WASHINGTON — House Republicans reached a tentative deal with the White House on Saturday night to raise the nation’s borrowing limit and avoid a catastrophic default on US sovereign debt.
“We are in agreement in principle,” House Speaker Kevin McCarthy said Saturday at the Capitol. “We still have a lot of work to do, but I believe this is an agreement in principle that the American people deserve.”
McCarthy said he spoke with President Joe Biden twice on Saturday about the plan. “I expect to finish writing the bill, check with the White House and talk to the president again tomorrow afternoon,” the California Republican said, “Then post its text tomorrow, and then vote on it in Wednesday.”
The deal, he said, “has historic spending cuts, consequential reforms that will lift people out of poverty and into work, and curb government overreach. No new taxes and no new government program.”
Biden called the deal “an important step forward that cuts spending while protecting critical programs for working people and growing the economy for everyone.”
He also offered a preview of the White House’s argument for House Democrats who are reluctant to support a bill that appears on its face as a Republican victory: In other words, it could be worse.
“The agreement protects my top priorities and the legislative achievements of Congressional Democrats,” Biden said, adding that it “represents a compromise, which means not everyone gets what they want.”
The White House invited all House Democrats to attend a virtual briefing on Sunday afternoon, presumably to explain what’s in the deal and encourage Democrats to vote for it.
The announcements mark the start of a lobbying blitz by House and Senate leaders in both parties to convince their members to vote for the package, which will need to win enough votes in the GOP-controlled House and Democratic-held Senate to raise US debt ceiling in time to meet June 5 deadline.
At least one senator, Utah Republican Mike Lee, has threatened to use procedural maneuvers in the Senate to hold up a debt ceiling bill as long as possible if he doesn’t like its content.
In the House, a group of 35 ultraconservative members publicly pressured McCarthy to demand more concessions from Democrats and “hold the line.” They also indicated that they would not support a deal that they felt was giving away too much.
A vote to raise the debt limit does not authorize additional government spending. It only allows the Treasury to meet obligations that Congress has previously approved, some of them decades ago.
However, many Republicans view the biennial vote to raise the debt limit as an opportunity to extract concessions from Democrats in exchange for their votes to avoid a debt default.
This time around is no different. Republicans have asked the White House to agree to a bill that contains, at a minimum, baseline cuts in government spending, new work requirements for public assistance, energy reform and the repeal to unused Covid emergency funds.
The final push on the deal took place on Saturday, despite updated guidance from the Treasury Department on Friday afternoon that specified June 5 as the debt default deadline.
That’s five days later than the previous Treasury guidance date of June 1. The update was taken by some lawmakers as meaning there would be less pressure on negotiators because the date could slide again.
But that’s not how GOP chief negotiator Rep. Patrick McHenry, NC. Treasury Secretary Janet Yellen is praised as “a woman of principle [who] is faithful to the law,” McHenry told reporters Friday that the new date puts to rest any lingering questions about when the default will occur. “Now we know, and it puts more pressure on us to perform,” he said.
Yellen explained that the agency is “scheduled to make approximately $130 billion of payments and transfers” in the first two days of June. This would “leave the Treasury with very low levels of resources.”
As of the week of June 5, the Treasury owed “approximately $92 billion in payments and transfers,” Yellen wrote in a public letter to House Speaker Kevin McCarthy.
Unless the debt limit is raised in time and the government is allowed to borrow more, “Our projected resources will not be sufficient to meet all these obligations.”
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