US president and House Speaker Kevin McCarthy is confident they will get enough support to avoid an unprecedented default.
US President Joe Biden has reached an agreement with House Speaker Kevin McCarthy to raise the debt ceiling for two years until January 1, 2025, saying the agreement is ready to be moved to Congress. for one vote.
The Democratic president and the Republican speaker spoke Sunday night as negotiators rushed to draft and post the text of the bill to allow lawmakers to review compromises that may not be popular with progressive Democrats or right-wing Republicans.
Both men hope they can get enough votes before the June 5 deadline to avoid the federal government’s first-ever default. A vote in the House is expected on Wednesday.
“Great news,” Biden declared Sunday night at the White House.
“The agreement prevented the worst possible crisis – a default – for the first time in the history of our country,” he said. “Takes the threat of a catastrophic default off the table.”
The deal follows weeks of heated negotiations between Biden and Republicans to avoid a default that could cause financial markets to freeze and lead to an international financial crisis.
Analysts say millions of jobs will be lost, borrowing and unemployment rates will jump, and a stock market slump could wipe out trillions of dollars in household wealth. A default would destroy the $24 trillion market for treasury debt.
Biden said he expects McCarthy to have the necessary votes to pass the deal.
The compromise announced late Saturday includes spending cuts, but risks angering some lawmakers as they scrutinize concessions.
The 99-page bill would also take away unused COVID-19 funds, speed up the permit process for some energy projects and include additional work requirements for food assistance programs for of poor Americans.
Senate Republican Leader Mitch McConnell applauded the deal and called on the Senate to act quickly to pass it without undue delay if it passed the House.
“Today’s agreement makes urgent progress toward preserving our nation’s full faith and credit and is a necessary step toward improving our financial stability,” McConnell said.
McCarthy dismissed threats by opposition within his own party, saying “over 95 percent” of House Republicans were “very happy” about the deal.
“This is a very strong bill that most Republicans will vote for,” the California Republican told reporters at the US Capitol. “You can have Republicans and Democrats move it to the president.”
Republicans control the House by a 222-213 majority, while Democrats control the Senate by 51-49. These narrow margins mean that moderates from both sides must support the bill if it is opposed by hardliners in either or both parties.
“I’m not happy with some of the things I’ve heard,” Representative Pramila Jayapal, who chairs the Congressional Progressive Caucus, told CNN’s State of the Union.
He praised the deal, which he said would save Medicaid from benefit cuts while expanding the safety net for veterans and the homeless.
“We continue to take responsibility for the student debt that we have,” he said, referring to Biden’s policy of limited debt forgiveness.
Progressive Democrats in both chambers said they would not support any deal that would have increased work requirements for government food and health care programs.
The agreement increases work requirements on food assistance for some people ages 50 to 54, but White House officials say the carefully worded text means roughly the same number of person will be subject to the same requirements as the case under the current law.
