The White House and Republican negotiators reached a tentative deal late Saturday on a plan to raise the U.S. debt ceiling to avoid a default.
The framework of the agreement raises the nation’s debt ceiling for two years — past the 2024 general election — and includes new federal spending limits.
President Joe Biden and House Speaker Kevin McCarthy (R., Calif.) announced the deal late Saturday after a 90-minute phone call. The agreement needs to wind its way through Congress, where lawmakers on both sides of the aisle have criticized it.
Biden called it an “important step forward” in a statement on Saturday. “The agreement respresents a compromise, which means not everyone gets what they want,” he said.
McCarthy this morning expressed confidence the bill would pass, pushing back at reporters’ questions about criticism from conservative House Republicans.
Members of the Freedom Caucus have complained online about the proposal. Rep. Ken Buck (R., Colo.) said he is “appalled” by what he calls the “debt ceiling surrender.” Fellow Colorado Republican Rep. Lauren Boebert said in a tweet she was a “no” vote on the deal. “Our voters deserve better than this,” she said.
The deal was announced within days of the so-called “X-date,” when Treasury Secretary Janet Yellen had warned Congress that the U.S. government was projected to run out of extraordinary maneuvers to keep paying all of its bills. The federal government officially reached its $31.4 trillion federal borrowing limit in late January.
On Friday, Yellen said that date was June 5, a few days later than her original June 1 estimate.
In the days leading up to the agreement, negotiators appeared to be approaching consensus in a few areas: Recovering millions in unspent Covid-19 relief funds, reforming energy permitting, and imposing stricter work requirements on recipients of some social welfare programs.
This is a developing news story. Check back here for details.
Write to Janet H. Cho at janet.cho@dowjones.com and to Liz Moyer at liz.moyer@barrons.com
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