Biden, House Republican Leaders Strike Deal ‘in Principle’ to Raise U.S. Debt Ceiling

US President Joe Biden and top Republicans have struck a deal to raise the $48 trillion debt ceiling, ending a months-long stalemate.

US President Joe Biden. Picture: AFP

President Biden and House Speaker Kevin McCarthy (R., Calif.) have reached a tentative agreement for raising the nation’s borrowing limit for two years while placing new limits on spending over that period, according to a person familiar with negotiations, moving to end a standoff that has threatened a historic default on U.S. government debt and put the global economy on edge.

The agreement was announced after Biden and McCarthy spoke by phone on Saturday night for roughly 90 minutes and follows weeks of negotiations between the White House and GOP leaders in the House.

“We have come to an agreement in principle, we still have a lot of work to do,” McCarthy told reporters shortly after 9pm. ET. He said he planned to brief House Republicans later that evening and that the House could vote on Wednesday.

Democrats scheduled a briefing for Sunday evening, a Democratic aide said.

Lawmakers and the White House are under pressure to move quickly. Treasury Secretary Janet Yellen has said the U.S. could run short of money to pay its debts as soon as June 5, a scenario that could have deep economic and financial consequences.

The agreement would keep nondefense spending in 2024 at roughly the same level as fiscal year 2023 and increase it by roughly 1% in 2025, the person familiar with the negotiations said. It would put in place some new restrictions on certain government aid programs, such as food stamps. Specifically, the deal raises the age cut-off — to 54 from 49 — for a requirement that people without disabilities or dependents either be employed or enrolled in a work program to qualify for federal food aid. Republicans had sought to raise the age cut-off to 55.

The Wall Street Journal