Details of US debt ceiling deal being worked on to avoid catastrophic default | US Congress

Legislation was being urgently drafted in Washington on Sunday to flesh out the details of the tentative agreement to raise the US debt ceiling reached between Joe Biden and House Speaker Kevin McCarthy hours earlier, with the aim of submitting it to Congress and avoiding a catastrophic crisis and unprecedented default in early June.

Biden and McCarthy held a 90-minute phone call earlier Saturday night to discuss the deal, with the Democratic U.S. president joining the call since retiring from Camp David and the Republican president in the nation’s capital.

Biden said: ‘The deal represents a compromise, which means not everyone gets what they want. It’s the responsibility of governing,’ while calling the pact a ‘big step forward’ .

McCarthy said “America wins on this one” but he will have to push the legislation through the Republican-controlled House, where his party only holds a five-seat majority. It faces hostility from its far-right members who are expected to be reluctant to cut spending they deem not deep enough, while progressives may be more likely to stifle the cuts they loathe in order to push through the ‘OK.

On Sunday morning, McCarthy bragged on Fox News Sunday that “there’s nothing in the bill for Democrats” even though Biden has achieved his fundamental goal of persuading the Republican to agree to an increase in the cap of the debt. McCarthy predicted House GOP members will support the deal. Details of the deal were due to be presented to lawmakers on Sunday evening.

Speaking on Capitol Hill later Sunday morning, McCarthy added, “We’re going to put the bill on the [House] floor in 72 hours and pass it.

To cut spending, as Republicans had insisted, the package includes a two-year budget deal that would keep spending flat for 2024 and impose limits for 2025. That’s in exchange for raising the ceiling on the debt for two years, until after the next election.

It also expands some work requirements for food stamp recipients and changes an environmental law to try to streamline reviews to build new energy projects.

Treasury Secretary Janet Yellen said the United States could default on its debt obligations by June 5 if lawmakers do not act in time to raise the federal debt ceiling.

As Democratic and Republican negotiators work out the final details of a deal to suspend the federal government’s debt ceiling at $31.4 billion in the coming days, McCarthy could be forced to argue behind the scenes.

A failure by Congress to settle its self-imposed debt ceiling by June 5 could trigger a default that would rattle financial markets and plunge the United States into a deep recession.

House Minority Leader and New York Democratic Representative Hakeem Jeffries said in a letter that Biden and McCarthy were scheduled to speak again on Sunday afternoon to finalize their deal before members of Congress are briefed.

“I am grateful to President Biden for his leadership in preventing a devastating default,” said the letter says.

Washington State Democratic Rep. Pramila Jayapal, chair of the Congressional Progressive Caucus, told CNN’s State of the Union program Sunday morning that she was unsure whether she would vote for the agreement because she needed to see “the exact legislative text”.

She said the idea of ​​tightening the conditions for starving families to claim food stamps was “absolutely terrible policy”.

But she warned, “The American people need to understand that we are on the brink of default” after House Republicans forced a negotiation, while also warning that Republicans want to cut “base spending on things like health, education, childcare, all of the things you care about”.

South Dakota Republican Congressman Dusty Johnson, who was involved in behind-the-scenes negotiations ahead of the leaders’ deal, applauded “a fantastic deal” on Sunday morning, also speaking to CNN.

Johnson noted he was the traditional Republican caucus leader in the House and said he believed there were some Freedom caucus members who would vote for him, but perhaps not the most ‘colorful’ .

Republicans control the House by 222-213, while Democrats control the Senate by 51-49. These margins mean that moderates on both sides will have to support the bill, as any compromise will almost permanently lose support from the far left and far right of each party.

To win the president’s gavel, McCarthy agreed to allow any member to seek a vote to unseat him, which could lead to his ousting if he seeks to work with Democrats. On Sunday, he said he was “not at all” worried that might happen.

Hours before the deal was announced, some hardline Republicans balked at McCarthy cooperating with the White House.

“If the president’s negotiators bring back a substantial net increase in the debt ceiling…an increase so large it even shields Biden from the presidential problem. [election]…this is war,” tweeted Rep. Dan Bishop, a member of the right-wing Freedom Caucus.

The deal does exactly that, according to informed sources: It suspends the debt ceiling until January 2025, after the November 2024 presidential election, in exchange for spending caps and cuts to government programs.

Right wing Ralph Norman of South Carolina called the plan deals with “madness”.

Progressive Democrats in both houses have said they will not support any deal with additional work requirements in exchange for government benefits. According to sources, this agreement adds work requirements to food aid for people aged 50 to 54.

The deal would increase spending on military and veterans’ care, and cap spending on many national discretionary programs, according to people familiar with the talks. But Republicans and Democrats will have to debate, because the agreement does not specify them.