President Biden and House Speaker Kevin McCarthy strike a deal on Saturday to raise the federal government's borrowing limit and cut some spending.
President Biden and House Speaker Kevin McCarthy reached an “agreement in principle” to raise the federal government’s borrowing limit and cut some spending, McCarthy said Saturday — ending a months-long stalemate that brought the government to the brink of defaulting on its credit for the first time.
Biden and McCarthy will need to sell the compromise to their respective allies in Congress, an uphill battle that includes convincing far-right GOP members who wanted McCarthy to go further in extracting spending cuts and progressive Democrats who say Biden caved to right-wing demands.McCarthy said that he and Biden had spoken twice on Saturday and that “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.
“I don’t think everybody is going to be happy at the end of the day,” McCarthy told reporters Thursday as talks were still ongoing. “That’s not how this system works.” McCarthy and the White House will need dozens of Democrats to back the bipartisan plan in order to pass it in the narrowly divided House. Both the House and the Democratic-controlled Senate need to pass a bill by June 5, when the Treasury Department projects the government will run out of cash to pay its bills.
The U.S. has trillions of dollars in outstanding debt, and missing interest payments on its obligations would shock stock markets and sharply raise the cost of borrowing to finance Washington’s deficit spending, ultimately rippling through businesses and consumers. Some progressive lawmakers have pushed Biden to invoke the 14th Amendment, which says the “validity of the public debt, authorized by law ... shall not be questioned.”
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