President Joe Biden and House Speaker Kevin McCarthy have agreed to raise the debt ceiling over two years until January 1, 2025, and the deal is now available for a vote in Congress.
Sunday evening, the Democratic president and Republican speaker spoke as negotiators raced to draft and post the bill's text so lawmakers could review compromises unlikely to be popular with progressive Democrats or hard-right Republicans.
The two men expect to secure enough votes before the June 5 deadline to prevent the federal government's first-ever default. On Wednesday, a vote is anticipated in the House.
Biden announced Sunday evening at the White House, "Good news."
"The agreement prevents the worst possible crisis – a default – for the first time in our nation's history," he stated. "Eliminates the possibility of a catastrophic default."
The agreement results from weeks of heated negotiations between Biden and Republicans to avoid a default that could cause financial markets to halt and lead to a global financial crisis.
According to analysts, millions of jobs would be lost, the borrowing and unemployment rates would increase, and a stock market crash could wipe out trillions of dollars in household wealth. A default would virtually destroy the $24 trillion market for government debt.
Biden stated that he anticipated McCarthy to have the votes essential for the agreement to pass.
The late-Saturday announcement of a compromise that includes spending cuts risks infuriating some legislators upon closer inspection of the concessions.
In addition, the 99-page measure will recover unused COVID-19 funds, expedite the permit process for certain energy projects, and impose additional work requirements for food aid programs for poor Americans.
Mitch McConnell, the leader of the Senate's Republican caucus, applauded the agreement and urged the Senate to approve it without unnecessary delay once it has passed the House.
McConnell stated, "Today's agreement makes urgent progress toward preserving our nation's full faith and credit and is a much-needed step toward reorganizing its finances."
McCarthy dismissed opposition threats within his party, stating that "over 95 percent" of House Republicans were "overwhelmingly excited" about the agreement.
"This is a good, strong bill that the majority of Republicans will vote for," the Republican from California told reporters at the US Capitol. Republicans and Democrats will be able to forward the issue to the president.
Republicans hold a 222-213 majority in the House, while Democrats hold a 51-49 majority in the Senate. These slim margins imply that moderates from both parties will be required to support the measure if it is opposed by either or both parties extremists.
Representative Pramila Jayapal, chair of the Congressional Progressive Caucus, stated on CNN's State of the Union, "I'm not pleased with some of the things I've been hearing."
She lauded the agreement, which she claimed would prevent Medicaid benefit cuts while expanding the safety net to include veterans and the homeless.
"We kept the student debt responsibility that we have," she said, referring to Biden's limited loan forgiveness policy.
Progressive Democrats in both chambers have stated that they will oppose any agreement that includes additional labor requirements for government food and healthcare programs.
The agreement does add work requirements to food aid for some people aged 50 to 54, but White House officials said the carefully worded text would result in approximately the same number of people being subject to the requirements as under the current law.
