Negotiators for Democratic President Joe Biden and Republican House Speaker Kevin McCarthy have reached a tentative deal to raise the United States debt ceiling for two years while also cutting federal spending.
Top negotiators for the White House and Republicans reached the agreement on Saturday to raise the debt limit, a breakthrough after weeks of tense talks that came just days ahead of the deadline, sources confirmed to The New York Times. The sources who confirmed the deal to The New York Times did so on the condition of anonymity because they were not authorized to comment publicly. The White House has not formally announced the agreement.
If Democrats and Republicans did not strike a deal and failed to raise the $31.5 trillion debt limit, the U.S. faced defaulting for the first time in history. The Treasury cautioned lawmakers that it could run out of money to pay bills by early June, a dire predicament that economic experts warned would have had catastrophic consequences for the national and global economies.
Newsweek reached out via email to Biden and McCarthy representatives for comment.
McCarthy shared news of the agreement on his Twitter account on Saturday evening where he slammed the president for waiting to negotiating for months but confirmed they did reach a deal “in principle.”
“I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people,” the California Republican said on Twitter.
I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people.
I’ll deliver a statement at 9:10pm ET. Watch here:https://t.co/vmn31INPH5
— Kevin McCarthy (@SpeakerMcCarthy) May 28, 2023
He told reporters Saturday night that he would not release details of the agreement until lawmakers had a chance to go over the proposal but said it will be available to the public on Sunday and the House will vote on Wednesday.
McCarthy said the plan has “historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, reign in government overreach, there are no new taxes [and] no new government programs.”
In another tweet, McCarty praised the deal as a “responsible debt limit agreement.”
“Republicans are poised to deliver big, consequential change in Washington,” he said. “Soon, we will vote for a responsible debt limit agreement that stops Democrats’ reckless spending, claws back unspent COVID funds, blocks Biden’s new tax schemes, & much, much more.”
Republicans are poised to deliver big, consequential change in Washington. Soon, we will vote for a responsible debt limit agreement that stops Democrats’ reckless spending, claws back unspent COVID funds, blocks Biden’s new tax schemes, & much, much more https://t.co/TQ7CblFsaM
— Kevin McCarthy (@SpeakerMcCarthy) May 28, 2023
Newsweek previously reported that under the proposed deal, the debt limit would be raised for two years while implementing strict caps on discretionary spending. The proposal likely includes some climate attributes, such as renewable energy projects, a goal of the Biden’s administration. The deal can also be seen as a win for McCarthy and Republicans because they have been demanding spending cuts and strict caps imposed on discretionary spending that is not related to the military or veterans.
However, the deadline still looms as Congress must now approve the proposal before the June 5, the date the Treasury says the government will run out of money. Support for the plan is not assured in the Republican-controlled House nor the Democratic-led Senate, where lawmakers from both parties will likely have issues with aspects of the agreement. Republicans wanted even more cuts whereas Democrats wanted the debt limit to be raised without preconditions.
Biden, McCarthy and other Congressional leaders have maintained that a default is off the table. They have been working to end the stalemate for weeks, talking as recently as Saturday evening to hammer out the final points.
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