Biden, McCarthy reach tentative US debt ceiling deal
STORY: After a months-long stalemate and growing worries over the world's biggest economy defaulting on its debts, U.S. President Joe Biden and top congressional Republican Kevin McCarthy reached a tentative deal over the government’s debt ceiling on Saturday evening.
“After weeks of negotiations, we have come to an agreement in principle. We still have a lot of work to do, but I believe this is an agreement in principle that's worthy of the American people.”
McCarthy announced the deal after a 90-minute phone call with the president.
The House speaker told reporters at Capitol Hill that he planned to speak to Biden again on Sunday after he finishes writing the bill, and aimed to put it to a vote on Wednesday.
In a statement, Biden called the deal "an important step forward", saying:
"The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing."
The deal would raise the 31.4-trillion-dollar debt limit for two years while capping spending over that time.
It also involves clawing back unused COVID funds, speeding up the permitting process for some energy projects and adding some work requirements for food aid programs for poor Americans.
The deal is needed to avoid a debt default that would destabilize the economy.
But it still needs to be passed by a closely divided Congress – and before the Treasury Department runs out of money to pay its bills.
That deadline is now on June 5, according to the Treasury.
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