Biden and McCarthy call for passage of increased US debt ceiling

US President Joe Biden and House Speaker Kevin McCarthy are urging Congress to approve an increase in the government’s borrowing limit to avoid a first-ever default, but on Sunday progressive Democratic lawmakers from left-leaning ideological Republicans and right-wingers of the party immediately expressed their opposition to the agreement reached between the two leaders.

Biden said in a statement late Saturday, “The deal represents a compromise, which means not everyone gets what they want. It is the responsibility to govern. He called the pact “an important step forward that cuts spending while protecting essential programs for workers and growing the economy for all.”

He said, “The agreement protects my top legislative priorities and accomplishments as well as those of Congressional Democrats. And this deal is good news for the American people because it prevents what could have been a catastrophic default and would have led to an economic recession, devastated retirement accounts and millions of lost jobs.

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McCarthy, on “Fox News Sunday,” said that from a Republican perspective, “there’s so much good stuff in there. It won’t do everything for everyone, but it’s a step in the right direction.

“I think you’re going to get a majority of Republicans to vote for this bill,” McCarthy said. While acknowledging some conservative resistance, “we were able to do that when the president said he wasn’t even going to talk to us.”

Full details of the “agreement in principle” that Biden and McCarthy reached late Saturday were not publicly known early Sunday. White House officials and McCarthy negotiators from the Republican majority in the House of Representatives were fine-tuning the text of the legislation that Congress will need to pass to suspend the country’s current debt ceiling of $31.4 trillion at a figure not specified in nearly two years in the first quarter of 2025, a few months after the presidential election in November 2024.

The debt ceiling must be raised so the government can borrow more money, or the US government will run out of cash to pay its existing bills on June 5, Congresswoman Janet Yellen, Secretary of the Treasury, has warned.

Yellen said that without an increase in the debt ceiling or a suspension of the borrowing limit, interest on US bonds held by foreign governments and individual US investors would be in jeopardy, along with allowances to US retirees and salaries of government employees and contractors. Without enough tax revenue flowing into the coffers of the United States to pay its bills, the government would be forced to prioritize the payments to be made.

Under the agreement, non-military spending will remain relatively flat in the government’s 2024 fiscal year beginning October 1, while increasing by a meager 1% in 2025. After 2025, there would be targets expenditure of appropriations, but they would not be enforceable.

The agreement calls for expanding work requirements for some Americans receiving food stamps to buy food, raising the required age from 49 to 54 at which work rules apply. It would also speed up the approval process for new energy projects.

The pact left in place Biden’s plan to forgive up to $20,000 in student loan debt, but says loan recipients will have to start making loan payments that had been halted during the coronavirus pandemic. The provision would become moot if the Supreme Court overturns Biden’s power to revoke the debt in a challenge to his action which it is expected to rule on by the end of June.

McCarthy said, “There is nothing in this bill for Democrats. We will spend less and encourage people to return to work.

Rep. Hakeem Jeffries, the leader of the House Democrats, told CBS’ “Face the Nation” that the deal “protects the American people from the devastating effects of cuts proposed by Republicans.” He said the pact keeps pensions and health insurance for older Americans intact as well as government assistance for those in need.

“I expect we’ll have the support of Democrats” to approve the debt ceiling increase, Jeffries said.

There were, however, grumblings from both progressive Democrats and conservative Republicans.

Rep. Pramila Jayapal, leader of the 102-member House Progressive Caucus, told CNN’s ‘State of the Union’ that Biden and Jeffries should be concerned about progressives’ support for passing the raise of the debt ceiling.

Jayapal criticized the expanded work requirements for food stamp recipients and said she was unsure whether she would vote for the debt ceiling increase.

“I’m not a big fan of the principle [agreements] executives,” she told CNN’s “State of the Union.” “It’s always, you know, a problem if you can’t see the exact legislative text. And we’re all trying to wade through the rotation right now. But I think it will depend on what the legislative text is.

Among Republicans, Rep. Bob Good wrote on Twitter, “No one claiming to be a conservative could justify a YES vote” on the package.

Another Republican critic of the deal, Rep. Ralph Norman, tweeted, “This ‘deal’ is madness.” He said a possible $4 trillion increase in debt over the next two years “with virtually no reduction is not what we agreed to. I will not be voting to put our bankrupt country.The American people deserve better.