Republican leaders in the House of Representatives and the White House have reached an “agreement in principle” to raise the debt ceiling — just over a week before the deadline to avoid a potential default.
Republican Speaker Kevin McCarthy first tweeted the news Saturday night. He said the parties have come to an “agreement in principle that is worthy of the American people.”
“We still have a lot of work to do,” McCarthy said on Saturday night, indicating to reporters that “the writing of it” was still left to be done in the evening.
He said the text is expected to be posted on Sunday, with a vote on Wednesday.
U.S. President Joe Biden confirmed the news roughly an hour later.
The Associated Press reported that central to the package is a two-year budget deal that would hold spending flat for 2024 and impose limits for 2025 in exchange for raising the debt limit for two years, pushing the volatile political issue past the next presidential election.
Negotiators agreed to some Republican demands for enhanced work requirements on recipients of food stamps that had sparked an uproar from House Democrats as a nonstarter.
Biden also spoke earlier in the day with Democratic leaders in Congress to discuss the status of the talks, according to three people familiar with the situation, who spoke on condition of anonymity because they were not authorized to discuss the matter publicly.
On Friday, Treasury Secretary Janet Yellen extended the deadline for an agreement to raise the government’s $31.4-trillion debt ceiling to June 5.
She said in a letter to Congress her department would make more than $130 billion in scheduled payments in the first two days of the month, but it would leave the Treasury “with an extremely low level of resources.”
As he left for Camp David on Friday, President Joe Biden had been asked what he would say to Democrats who didn’t want him to bow to Republicans on work requirements. The president said he didn’t “bow to anyone,” though it’s not yet known what may have been negotiated.
The Republican proposal on work requirements had vowed to save $11 billion over 10 years by raising the maximum age for existing standards that require able-bodied adults who do not live with dependents to work or attend training programs.
Current law applies those standards to recipients under the age of 50. The GOP plan would raise the age to include adults 55 and under. It would lower the number of exemptions that states can grant to some recipients subject to those requirements.
Lawmakers were tentatively not expected back at work until Tuesday, just six days before the new deadline when Yellen said the U.S. could start running out of cash to pay its bills. But with a deal now reached, it is likely lawmakers could return much sooner in order to review the deal and vote on the agreement.
In addition, McCarthy had promised lawmakers he would abide by the rule to post any bill for members to view 72 hours before holding a vote. The Democratic-held Senate, which has been in recess, has vowed to move quickly to send the package to Biden’s desk before the possible deadline.
What is contained in the deal will likely influence whether the House and Senate still vote in favour or against. With members of both parties having their own hard lines about what they would accept and each party holding narrow control of separate chambers, even a single vote could put raising the country’s debt limit in doubt.
— with files from the Associated Press