With days remaining before a potential first-ever government default, President Joe Biden and House Speaker Kevin McCarthy reached a final deal Sunday on an agreement to raise the nation’s debt ceiling and work to secure enough Republican and Democratic votes to pass the measure in the coming week.
The Democratic president and Republican speaker sparred with each other Sunday night as negotiators rushed to draft the text of the bill so lawmakers could weigh in on compromises the hard-right is unlikely to support. or left side. Instead, leaders are scrambling to win support from the political center as Congress rushes toward votes ahead of a June 5 deadline to avoid a crippling federal default.
“Good news,” Biden declared Sunday night at the White House.
“The agreement prevents the worst possible crisis, a default, for the first time in our country’s history,” he said. “Takes the threat of a catastrophic default off the table.”
The president urged both parties in Congress to come together for speedy passage. “The speaker and I have made it clear from the beginning that the only way forward is a bipartisan agreement,” he said.
The compromise announced late Saturday includes spending cuts but risks angering some lawmakers as they eye 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, too, is confident of the statements in the Capitol: “At the end of the day, people can look together to pass this.”
The next few days will determine whether Washington can once again avoid a US debt default, as it has done many times before, or whether the global economy enters a potential crisis.
In the United States, a default could cause financial markets to freeze and trigger a global financial crisis. Analysts say millions of jobs will be lost, borrowing and unemployment rates will rise, and a stock-market crash could wipe out trillions of dollars in household wealth. All would damage the $24 trillion market for Treasury debt.
Eager retirees and others are already making contingency plans for missed checks, with the next Social Security payments due soon as the world watches America’s leadership at stake. .
McCarthy and his negotiators described the deal as a delivery for Republicans even though it fell short of the massive spending cuts they sought. Top White House officials are coaching Democratic lawmakers and have called some directly to try to drum up support.
As Sunday wore on, negotiators worked to write the text of the bill and lawmakers took questions.
McCarthy told reporters at the Capitol on Sunday that the deal “doesn’t get everything everybody wants,” but that’s to be expected in a divided government. Privately, he told lawmakers on a conference call that Democrats “got nothing” they wanted.
A White House statement from the president, released after Biden and McCarthy spoke on the phone Saturday night and an agreement in principle followed, said the deal “prevents what could be a catastrophic default .”
Support from both parties will be needed to win congressional approval before the government’s expected June 5 default on US debt. Lawmakers are not expected to return to work from the Memorial Day weekend until Tuesday, at the earliest, and McCarthy promised lawmakers he would follow the rule of posting any bill within 72 hours before vote.
Negotiators agreed to some Republican demands for higher work requirements for food stamp recipients that House Democrats called a nonstarter.
With the outlines of an agreement in place, the legislative package could be drafted and shared with lawmakers in time for House votes as soon as Wednesday, and next week in the Senate.
The centerpiece of the compromise is a two-year budget deal that essentially doesn’t increase spending for 2024, while boosting it for defense and veterans, and the cap increases to 1% for 2025. That’s in addition to the cap increase. on debt for two years, driving the volatile political issue in the next presidential election.
By driving hard to impose tougher work requirements on those receiving government assistance, Republicans got some of what they wanted. It ensures that people ages 49 to 54 with food stamp aid must meet work requirements if they are able-bodied and have no dependents. Biden got waivers for veterans and homeless people.
The deal puts changes in the landmark National Environmental Policy Act that designates “a lead agency” to develop environmental reviews, in hopes of streamlining the process.
It freezes some funding to hire new Internal Revenue Service agents as demanded by Republicans, and withdraws about $30 billion for coronavirus relief, keeping $5 billion for developing the next generation of vaccines. COVID-19.
The deal came together after Treasury Secretary Janet Yellen told Congress that the United States could default on its debt obligations on June 5 — four days later than previously estimated — if lawmakers do not act. in time. Raising the national debt limit, now at $31 trillion, allows more borrowing to pay bills that are already insured.
McCarthy commands only a slim Republican majority in the House, where hard-right conservatives could fight any deal that doesn’t go far enough as they try to cut spending. By compromising with Democrats, he risks losing support from his own members, setting up a challenging moment in the race for the new speaker.
“I think you’re going to get a majority of Republicans voting for this bill,” McCarthy said on “Fox News Sunday,” adding that since Biden supported it, “I think there’s going to be a lot of Democrats who will vote for this too.”
House Democratic leader Hakeem Jeffries of New York told CBS’ “Face the Nation” that he expects to have Democratic support but declined to give a number. Asked if he could guarantee there would be no default, he said, “Yes.”
A 100-strong group of moderates in the New Democratic Coalition gave an important nod of support on Sunday, saying in a statement that it was confident Biden and his team had “delivered a viable, bipartisan solution to end the this crisis” and working to ensure the agreement will receive support from both sides.
The coalition could provide enough support for McCarthy to win over members on the right side of his party who expressed opposition even before the wording of the bill was released.
It also takes pressure off Biden, who has faced criticism from progressives for giving in to what they call hostage-taking by Republicans.
Democratic Rep. said. Pramila Jayapal of Washington state, who chairs the Congressional Progressive Caucus, told CBS that the White House and Jeffries should be concerned if caucus members will support the deal.
