On Saturday evening, just days before a potential default, a tentative agreement has been reached between President Joe Biden and House Speaker Kevin McCarthy (R-CA) on the debt ceiling.
“The White House and negotiators for House Republicans have reached an agreement in principle to avert a debt default, two sources familiar with the situation said,” Reuters reports, adding that Biden and McCarthy had a 90 minute phone call on Saturday.
McCarthy held a brief conference following the news of a potential deal in which he outlined the progress that has been made.
“After weeks of negotiations, we have come to an agreement in principle. We still have a lot of work to do, but I believe this is an agreement in principle that is worthy of the American people,” McCarthy said. “It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, [and] rein in government overreach. There are no new taxes, no new government programs…”
“We still have more work to do tonight to finish all the writing of it,” the speaker added.
McCarthy said he expects the text of the bill to be posted on Sunday, with a vote to be held on Wednesday.
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
Treasury Secretary Janet Yellen had warned that the federal government would default on June 5 if an agreement wasn’t reached. “We now estimate that Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5,” Yellen stated.
The Treasury Department said it has been enacting “extraordinary measures” since January when the United States hit its statutory limit of roughly $31.4 trillion, and has warned of dire economic consequences if the country is unable to reach a deal to lift the debt ceiling.
The White House and the GOP-led Congress have been engaged in a protracted battle over the details of a debt ceiling agreement. The president and Democrats broadly called for a clean debt ceiling raise even after the House passed a bill that would raise the debt ceiling while cutting discretionary spending and limit spending increases for the next decade.
The House Freedom Caucus, a bloc of conservative Republicans, previously said they would consider voting to raise the debt limit in exchange for a framework that returns expenditures to fiscal year 2022 levels, raises the debt ceiling only for the next year, and restricts annual spending growth to 1% over the next decade. McCarthy recently passed the framework in the House by means of the “Limit, Save, Grow Act.”
Ben Zeisloft and Tim Pearce contributed to this report.
