Biden and McCarthy reach ‘agreement in principle’ on debt ceiling

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The deal would avert a catastrophic US default, but it also risks angering both the Democratic and Republican sides over the concessions made to achieve it. Negotiators agreed to some Republican calls for stricter work requirements for food stamp recipients, which had caused uproar among House Democrats as non-starters.

Bipartisan support is required to gain Congressional approval.

The Democratic president and Republican spokesman reached the agreement after the two spoke by phone earlier Saturday night, McCarthy said. The country and the world I watched and waited for a resolution to a political standoff that threatened the US and world economy.

Once the outlines of an agreement are in place, the legislative package could be drafted and submitted to lawmakers in time for votes early next week in the House of Representatives and later in the Senate.

At the heart of the package is a two-year budget deal that would freeze spending until 2024 and set ceilings for 2025 in exchange for a two-year debt ceiling hike, postponing the sensitive political issue beyond the next presidential election.

Biden also spoke to Democratic leaders in Congress earlier in the day to update the talks, according to three people familiar with the situation, who spoke on condition of anonymity because they were not authorized to discuss the matter publicly.

The Speaker of the Republican House of Representatives had gathered his key allies behind closed doors in the Capitol negotiator pushed for a deal that would raise the country’s borrowing limit and prevent a first default on the federal debt, while also implementing spending cuts demanded by House Republicans.

Arriving at the Capitol earlier in the day, McCarthy said Republican negotiators were “closer to an agreement.”

McCarthy’s comments echoed the latest public assessment of Biden, who said Friday night that negotiations were “very close.” Biden and McCarthy last met in person on this issue on Monday.

Their new telephone discussion on Saturday came after Treasury Secretary Janet Yellen told Congress that the United States could default on its debt obligations by June 5 — four days later than previously estimated — if lawmakers don’t act in time to raise the federal debt ceiling. The extended “X-Date” gives the two sides a little more time while trying to reach a deal.

But as another day dragged on and financial disaster loomed ever closer, it seemed that some of the political issues that had plagued talks all week remained unresolved.

Both sides have indicated that one of the main obstacles is an attempt by the GOP to expand existing job requirements Food stamp recipients and other government aid programs, a long-standing Republican goal that Democrats have vigorously opposed. The White House said the Republican proposals were “cruel and pointless.”

They also appeared to be still working on a compromise on state permit changes that would relax regulations for developing oil, gas and renewable energy projects and encourage new transmission line connections.

McCarthy, who left before lunch on Saturday and returned with a large box of takeout at the Capitol, declined to elaborate on those discussions. One of his negotiators, Louisiana Rep. Garret Graves, said there was “no chance” Republicans would relent on the job requirements issue.

Americans and the world watched with unease as the risky negotiations threaten to wreak havoc on the US economy and undermine the world’s confidence in the country’s leadership. House negotiators left the Capitol at 2 a.m. the night before, only to return hours later.

Failure to raise the current $31 trillion borrowing limit to pay the country’s accrued bills would shake the US and global economy. Yellen said that failure to act by the new date would “create great hardship for American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.”

Concerned retirees and others were already making contingency plans for the next missed check Social Security Payments due next week.

The President, who spent part of the weekend at Camp David, continued to hold meetings with his negotiating team several times a day, matching offers and counter-offers. Biden was upbeat as he left the White House on Friday night, saying “It’s very close and I’m upbeat.”

All sides are also hearing from other lawmakers, including Sen. Kyrsten Sinema, the Arizona independent who has been at the center of major political debates, and Rep. Josh Gottheimer, DN.J., of the bipartisan Problem Solvers Caucus.

Biden and McCarthy appear to be agreeing on a two-year budget cut deal that would also extend the debt ceiling to 2025 after the next presidential election. The outlines of the agreement to cut spending in 2024 and cap spending growth at 1% in 2025 are beginning to take shape.

Republican Rep. Tom Emmer of Minnesota, who is responsible for counting votes from McCarthy’s slim majority to ensure passage of a deal, said he is telling ordinary lawmakers not to believe what they hear until party leaders come forward You news about every deal.

Any agreement would have to be a political compromise in a divided Congress. Many of the far-right Trump-aligned Republicans in Congress have long been skeptical of Treasury Department projections and are urging McCarthy to hang on.

“We are in constant contact with our members and make it clear to them that what is reported should not be accepted,” said Emmer. “If there is an agreement, we will inform them.”

The Republican work requirements proposal would save $11 billion over 10 years by raising the maximum age for existing standards that require able-bodied adults not living with dependents to work or attend training programs.

Under current law, these standards apply to recipients under the age of 50. The GOP plan would raise the age to adults under 55. This would reduce the number of exemptions states can grant to some recipients subject to these requirements.

Biden has said the job requirements for Medicaid are unrealistic. At first, he seemed potentially open to negotiating minor changes to food brands now known as the “Supplemental Nutrition Assistance Program” or “Supplemental Nutrition Assistance Program.” SNAPbut his position seems to be hardening.

Memorial Day weekend lawmakers are not expected to return to work until Tuesday at the earliest, and McCarthy has promised lawmakers he will abide by the rule of posting every bill 72 hours before the vote.

The Democrat-dominated Senate has largely stayed out of the negotiations, leaving the talks to Biden and McCarthy. New York Senate Majority Leader Chuck Schumer has promised to quickly send a compromise package to Biden’s desk.

After weeks of talks, no agreement was reached, in part because the Biden administration refused to negotiate with McCarthy for months, arguing that the country’s full faith and credit should not be used as leverage to push other partisan priorities enforce.

But Republicans in the House of Representatives were united behind it a plan to cut spending, just over legislation In late April, this would raise the debt ceiling in exchange for the spending cuts.

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Associated Press writers Zeke Miller, Stephen Groves, Fatima Hussein, Farnoush Amiri, Seung Min Kim, and video journalist Rick Gentilo contributed to this report.