Biden and GOP rush to finalize debt ceiling deal, garner support to stave off default

WASHINGTON (AP) — The first government default is days away, President Joe Biden and House Speaker Kevin McCarthy A deal was struck on Sunday Raise the nation’s debt ceiling while trying to ensure enough Republican and Democratic votes Send the quantity in next week.

The Democratic leader and the Republican speaker were scheduled to speak later in the afternoon, so negotiators rushed to post the legislative text so lawmakers could review a difficult compromise neither the hard-right nor the left supported. Instead, they are working to gather support from the political middle as Congress rushes towards votes ahead of the June 5 deadline. To avoid a harmful federal default.

“I think we’re in good shape,” Biden said.

The compromise announced late Saturday includes spending cuts, but risks angering some lawmakers as they scrutinize the concessions. Biden told reporters at the White House after returning from Delaware that he was confident the plan would make it to his desk and that there were no sticking points.

McCarthy, too, was optimistic about the views in the Capitol. “At the end of the day, people can look together to get through this.”

As it has done many times before, the coming days will determine whether Washington can once again default on the US debt or whether the global economy is entering a potential crisis.

In the United States, a US default would freeze financial markets and trigger an international financial crisis. Millions of jobs will disappear, borrowing and unemployment rates will soar, and a stock market crash could wipe out trillions of dollars in household wealth, analysts say. All of this would distort the $24 trillion market for Treasury debt.

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Anxious retirees and others were already making contingency plans for missed checks and the next Social Security payments coming soon as the world watched American leadership at risk.

McCarthy and his negotiators tried to portray the deal as a concession to Republicans. Top White House officials have been calling Democratic lawmakers to try to drum up support.

McCarthy told reporters at the Capitol on Sunday that the deal “didn’t get everyone what they wanted,” but that was expected in a divided government. Privately, he told lawmakers in a conference call that “Democrats got nothing.”

A White House statement released from the president after Biden and McCarthy spoke by phone Saturday evening after the deal in principle was announced, said it “prevents what could be a catastrophic default and lead to an economic recession, wiped out retirement accounts, and millions of jobs.”

Bipartisan support would be needed to get congressional approval first The government defaulted on the US debt on June 5. Lawmakers are not expected to return to work since the Memorial Day weekend before Tuesday, and McCarthy has promised lawmakers to post any bill 72 hours before voting.

Negotiators agreed to some Republican demands to increase work requirements for recipients House Democrats called food stamps a starter.

A legislative package, along with the outlines of a deal, could be drafted and shared with lawmakers in time for a House vote as soon as Wednesday, then in the Senate next week.

The centerpiece of the compromise is a two-year budget deal that would keep spending flat through 2024 and raise the debt ceiling by 1% for two years in exchange for two years of 2025 increases that would push the volatile political issue past the next presidential election.

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Pushing hard for a deal to impose tougher work requirements on government aid recipients, Republicans achieved some but not all they wanted. The deal would raise the current work requirement age for able-bodied adults without children from 49 to 54. Biden was able to get discounts for veterans and the homeless.

The two sides reached an ambitious change in federal permitting to facilitate the development of energy projects. Instead, the contract will result in changes to the milestone National Environmental Policy Act It will appoint a “single lead agency” to conduct environmental reviews, hoping to streamline the process.

The deal came together after Treasury Secretary Janet Yellen He told Congress that the U.S. could not repay its debt by June 5 if lawmakers did not act on time. Raising the nation’s debt ceiling to $31 trillion now allows it to borrow more to pay the nation’s already unpaid bills.

McCarthy commands only a slim Republican majority in the House, where hard-right conservatives can sufficiently oppose any deal while trying to cut spending. By compromising with Democrats for votes, he could lose the support of his own rank and file, setting up a life-challenging moment for the new speaker.

“I think the majority of Republicans are going to vote for this bill,” McCarthy said on “Fox News Sunday,” adding that since Biden supported it, “I think a lot of Democrats are going to vote for it. And that.”

House Democratic Leader Hakeem Jeffries of New York told CBS’ “Face the Nation” that he expected Democratic support to be there, but he declined to provide numbers. Asked if he could guarantee that there would be no default, he said, “Yes.”

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A 100-member group of moderate Democrats gave a key endorsement Sunday, with lawmakers in the New Dems coalition saying in a statement that Biden and his team “have offered a viable, bipartisan solution to end this crisis” and are working. To ensure that the agreement receives support from both parties.

The coalition could give McCarthy enough support to offset members on the right of his party who expressed opposition before the bill language was released.

Those concerned GOP lawmakers are “very colorful conservatives” who “didn’t vote for the thing when it was a Republican wish list,” said Rep. Dusty Johnson, Republican of South Dakota, one of the deal’s negotiators. CNN’s “State of the Union”

It also takes pressure off Biden, who has faced criticism from progressives for calling him hostage by Republicans.

Democratic Rep. Pramila Jayapal of Washington state, who chairs the Congressional Progressive Caucus, told CBS that the White House and Jeffries should be concerned about whether caucus members will support the deal.

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Price announced from New York. Associated Press writers Seung Min Kim and Stephen Groves and AP White House correspondent Jake Miller contributed to this report.

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