U.S. President Joe Biden and top congressional Republican Kevin McCarthy have reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling, ending a months-long stalemate.
However, the deal was described in terms that indicated it may not be absolute, and without any celebration — an indication of the bitter tenor of the negotiations, and the difficult path it has to pass through Congress before the United States runs out of money to pay its debts in early June.
“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,” McCarthy tweeted.
The deal would raise the debt limit for two years while capping spending over that time, and includes some extra work requirements for programs for the poor.
Biden and McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal.
“We still have more work to do tonight to finish the writing of it,” McCarthy told reporters on Capitol Hill. McCarthy said he expects to finish writing the bill Sunday, then speak to Biden and have a vote on the deal on Wednesday.
The deal will avert an economically destabilizing default, so long as they succeed in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned Friday will occur if the debt ceiling is not raised by June 5.
Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, including new work requirements on some benefit programs for low-income Americans and for funds to be stripped from the Internal Revenue Service, the U.S. tax agency.
The two sides had struggled to find common ground on spending levels. Republicans had pushed for an 8% cut to discretionary spending in the next fiscal year, followed by annual increases of 1% for several years.
Biden had proposed keeping spending flat in the 2024 fiscal year, which starts Oct. 1, and raising it 1% the year after that. He also had called for closing some tax loopholes, which Republicans rejected.