On Saturday night, negotiators for President Biden and Republican congressional leaders reached a last-minute, principled agreement to raise the debt ceiling. After weeks of delays that shook markets and stoked concerns about a catastrophic default, both sides finally reached a tentative agreement.
After hours of protracted negotiations, Mr. Biden and McCarthy spoke over the phone earlier Saturday evening.
Mr. Biden said on Twitter, “protects my and Congressional Democrats’ key priorities and legislative accomplishments,” he said. He also noted that it “represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing.”
McCarthy told reporters on Saturday morning that he was “optimistic” a deal would be reached despite spending the entire weekend at the Capitol.
“I just got off the phone with the president a bit ago,” Tweets from McCarthy. 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 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
Following the agreement, McCarthy held a brief press conference and stated that he anticipates the bill’s text to be made available to the public by Sunday and a House vote on Wednesday. Additionally, he promised to speak with Mr. Biden once more on Sunday.
The agreement’s precise terms were not immediately known but it learned that it would increase the debt ceiling for two years while maintaining non-defense spending at 2023 fiscal year levels for the same period. Following the agreement, non-defense spending would rise by 1% in the fiscal year 2025.
The agreement also keeps funding for medical care programs for veterans, such as the PACT Act, passed last year, and increased benefits for 3.5 million veterans exposed to toxic burn pits while serving in the military. THE AGREEMENT, the PACT Act’s Toxic Exposure Fund will continue to receive funding through at least 2025.
The negotiations had hit a major roadblock because of the work requirements. It was still unclear exactly how the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families (TANF) program would be affected by the agreement, even though it did not include any significant changes to Medicaid.
Familiar with the negotiations, Republican House leadership informed rank-and-file GOP members of the agreement in a late-night conference call.
On Sunday night, Democratic House members were scheduled to participate in a Zoom call with Biden administration officials. Before the deal was announced, Mr. Biden spoke with House Minority Leader Hakeem Jeffries and Senate Majority Leader Chuck Schumer.
The development happened just a few days before the government was predicted to run out of money to pay its bills, an unprecedented occurrence that would rock the world economy.
Treasury Secretary Janet Yellen postponed Friday’s estimated “x-date” deadline from June 1 to June 5, giving negotiators more time.
Given the small window of opportunity for drafting and passing the bill in Congress, the risk of default still exists.
Lawmakers must now translate the agreed-upon provisions into actual legislative text, which typically takes several days. Then, it must overcome anticipated opposition from lawmakers from both parties and pass both chambers of Congress.
Democrats believe the debt ceiling should be raised without restrictions, but conservatives have demanded significant spending cuts in exchange.
Numerous Democrats will likely be needed to balance out conservative Republicans who vote against the measure for the agreement to pass the House. Additionally, some progressives have vowed to oppose any bill that drastically reduces spending.
The timeline for passing a bill is further complicated because both the House and Senate are on recess for the Memorial Day holiday.
Members of Congress have been admonished by their respective leaders to be ready to travel back to Washington at a moment’s notice to vote on a deal.
Since Mr. Biden re-engaged on the issue after adamantly stating he would not negotiate on raising the debt ceiling, White House officials and McCarthy’s representatives have held periodic meetings at the Capitol and the White House to determine the specifics of a deal.
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In April, House Republicans passed a bill as their starting point in negotiations. By increasing the debt ceiling by $1.5 trillion or until the end of March 2024, that legislation would have also reduced federal spending by $4.5 trillion. Democrats charged Republicans with trying to cut funding for programs that help the poor.
When negotiations appeared to be at a deadlock, McCarthy and Mr. Biden met several times over the past few weeks to try and resolve their differences.
Both parties described their meetings as “productive.” It was challenging for them to come to terms with the specifics and sell them to their constituencies.
Sen. Mike Lee of Utah, a Republican, declared before a deal was reached that he would “use every procedural tool at my disposal to impede a debt-ceiling deal that doesn’t contain substantial spending and budgetary reforms.”
Early June is the time when the U.S. will probably be unable to pay its bills, according to repeated warnings from Yellen.
At the Wall Street Journal’s CEO Council Summit on Wednesday, Yellen made a virtual appearance and declared, “It seems almost certain that we will not be able to get past early June.”
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Emma is a Master of Science candidate at the California Institute of Technology. Since approximately four years ago, she has been a freelance writer, producing content for newspapers, magazines, blogs, and the internet