US President and House Speaker Kevin McCarthy believes they will be able to secure enough support to avoid an unprecedented default.
U.S. President Joe Biden and House Speaker Kevin McCarthy finalized a deal to raise the debt ceiling within two years to Jan. 1, 2025, saying it was ready for a congressional vote.
As the Democratic president and Republican speaker spoke Sunday night, negotiators scrambled to draft and release the text of the bill to allow lawmakers to review a compromise unlikely to be popular with progressive Democrats or far-right Republicans.
The pair hope they can secure enough votes before the June 5 deadline to avoid a first-ever default by the federal government. The House of Representatives is expected to vote on Wednesday.
“Great news,” Biden announced Sunday night at the White House.
“This agreement prevented the worst crisis – a default – for the first time in our country’s history,” he said. “Eliminates the threat of a catastrophic default.”
The agreement comes after weeks of intense negotiations between Biden and Republicans to avoid a default that could freeze financial markets and lead to an international financial crisis.
Analysts say millions of jobs will disappear, borrowing and unemployment rates will soar, and a stock market crash could wipe trillions of dollars in household wealth. A default would all but destroy the $24 trillion Treasury market.
Biden said he expects McCarthy will get the votes necessary to get the deal through.
The compromise, announced late Saturday, includes spending cuts, but risks angering some lawmakers as they scrutinize the concessions.
The 99-page bill would also recoup unspent COVID-19 funds, speed up the permitting process for some energy projects and include additional work requirements for food assistance programs for America’s poor.
Senate Republican Leader Mitch McConnell applauded the agreement and called on the Senate to act quickly and without unnecessary delay after the House passes it.
“Today’s agreement makes urgent progress in preserving the integrity of our nation’s confidence and credit, and is a much-needed step in getting its financial institutions in order,” McConnell said.
McCarthy dismissed threats of opposition from within his own party, saying “more than 95 percent” of House Republicans were “very excited” about the deal.
“It’s a good strong bill that a majority of Republicans will vote for,” the California Republican told reporters at the U.S. Capitol. “You’re going to enable Republicans and Democrats to hand it over to the president.”
Republicans control the House of Representatives with a 222-213 majority, while Democrats control the Senate with a 51-49 majority. Those narrow margins mean that if the bill is opposed by hardliners on either or both sides, moderates on both sides will have to support it.
“I’m not happy with some of the things I’ve heard,” Representative Pramila Jayapal, chairman of the Congressional Progressive Caucus, told CNN’s State of the Union.
She praised the deal, which she said would free Medicaid from benefit cuts while expanding the safety net to veterans and the homeless.
“We retained our student debt liability,” she said, referring to Biden’s limited loan forgiveness policy.
Progressive Democrats in both chambers have said they would not support any deal with additional job requirements for government food and health care programs.
The agreement did add work requirements to food assistance for some people ages 50 to 54, but White House officials said the carefully worded text meant roughly the same number of people would be subject to the requirements as under current law.
