WASHINGTON (AP) – With days left before a potential first-ever government default, President Joe Biden and House Speaker Kevin McCarthy reached a final deal on Sunday on a deal to raise the nation’s debt ceiling and worked to secure enough Republican and Democratic votes to pass the measure next week.
The Democratic president and the Republican speaker spoke to each other Sunday night as negotiators rushed to draft and post the 99-page text of the bill. so that lawmakers can review compromises that neither the hard right nor the left can support. Instead, leaders are working to rally support from the political middle as Congress rushes to votes before a June 5 deadline. to avoid a disastrous federal default.
“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 president urged both parties in Congress to come together for speedy passage. “The speaker and I have made it clear from the beginning that the only way forward is a bipartisan agreement,” he said.
The compromise announced late Saturday includes spending cuts but risks angering some lawmakers as they scrutinize concessions. Biden told reporters at the White House upon his return from Delaware that he was confident the plan would reach his desk. The bill was posted on Sunday night.
McCarthy, too, is confident in the statements of the Capitol: “At the end of the day, people can look to pass it.”
The days ahead will determine whether Washington can once again avoid a US debt default, as it has done many times before, or whether the global economy has entered a potential crisis.
In the United States, a default could cause financial markets to freeze and trigger an international financial crisis. Analysts say millions of jobs will disappear, borrowing and unemployment rates will jump, and a stock-market slump could wipe out trillions of dollars in household wealth. This would all but destroy the $24 trillion market for Treasury debt.
Worried retirees and others are already making contingency plans for unpaid checks, with the next Social Security payment due when the world sees America’s leadership in jeopardy.
McCarthy and his negotiators described the deal as delivering for Republicans even though it lacked the substantial spending cuts they were seeking. Top White House officials briefed Democratic lawmakers and called some directly to try to drum up support.
As Sunday progressed, negotiators worked hard to write the text of the bill and lawmakers raised questions.
McCarthy told reporters at the Capitol on Sunday that the deal “won’t get everybody what everybody wants,” but that’s to be expected in a divided government. Privately, he told lawmakers on a conference call that Democrats “got nothing” they wanted.
A White House statement from the president, issued after Biden and McCarthy spoke by phone Saturday night and reached an agreement in principle, said the agreement “prevents what could have been a catastrophic default.”
Support from both parties is needed to win congressional approval before the planned June 5 government default on US debt. Lawmakers are not expected to return to work from the Memorial Day weekend before Tuesday, at the earliest, and McCarthy has promised lawmakers he will abide by the rule that any bill be tabled for 72 days. time before voting.
Negotiators agreed to some Republican demands for more work requirements for recipients on food stamps that House Democrats called a nonstarter.
With the outlines of an agreement in place, the legislative package could be drafted and shared with lawmakers in time for votes in the House on Wednesday, and later next week in the Senate.
The centerpiece of the compromise is a two-year budget deal that essentially keeps spending flat for 2024, while increasing it for defense and veterans, and increasing the increase to 1% for 2025. issue in politics in the last presidential election.
In pushing hard to impose tougher work requirements on government assistance recipients, Republicans have gotten some of what they want. It ensures that people ages 49 to 54 with food stamp assistance must meet work requirements if they are able-bodied and have no dependents. Biden got waivers for veterans and homeless people.
The agreement sets out changes to the landmark National Environmental Policy Act designation of “a lead agency” in the development of environmental reviews, in the hope of streamlining the process.
It froze some funds to hire new Internal Revenue Service agents as requested by Republicans, and withdrew about $30 billion for coronavirus reliefsaved $5 billion for the development of the next generation of COVID-19 vaccines.
The deal was agreed after Treasury Secretary Janet Yellen Congress was told that the United States could default on its debt obligations on June 5 – four days later than previously estimated – if lawmakers did not act in time. Raising the national debt limit, currently at $31 trillion, allows for more borrowing to pay bills that are already insured.
McCarthy commands only a small Republican majority in the House, where far-right conservatives could resist any deal that doesn’t go far enough as they try to cut spending. By compromising with the Democrats, he risks losing support from his own members, setting up a potentially challenging career for the new speaker.
“I think you’re going to get a lot of Republicans voting for this bill,” McCarthy said on “Fox News Sunday,” adding that because Biden supports it, “I think there’s going to be a lot of Democrats who are going to vote for it.” this too.”
House Democratic leader Hakeem Jeffries of New York said on CBS’ “Face the Nation” that he expects to have Democratic support but declined to give a number. Asked if he could guarantee there would be no default, he said, “Yes.”
A 100-strong group of moderates in the New Democratic Coalition gave a significant nod of support Sunday, saying in a statement they were confident that Biden and his team had “delivered a viable, bipartisan solution to end this crisis” and work to ensure. the agreement will receive support from both parties.
The coalition could provide enough support for McCarthy to win back members on the right side of his party who expressed opposition before the wording of the bill was released.
It also takes pressure off Biden, who has faced criticism from progressives for giving in to what they call hostage-taking by Republicans.
The Democratic Rep. Pramila Jayapal of Washington state, who leads the Congressional Progressive Caucus, told CBS that the White House and Jeffries should be concerned if caucus members support the deal.
___
Price reported from New York. Associated Press writers Seung Min Kim and Stephen Groves and AP White House Correspondent Zeke Miller contributed to this report.