After weeks of negotiations, President Joe Biden and House Speaker Kevin McCarthy have struck an agreement to avert a potentially devastating government default
It’s a deal no one in Washington claims to really like. But after weeks of negotiations, President Joe Biden and House Speaker Kevin McCarthy have struck an agreement to raise the debt ceiling and avert a potentially devastating government default.
The stakes are high for both men — and now each will have to persuade lawmakers in their parties to vote for it. Treasury Secretary Janet Yellen said last week that the United States could run out of cash to pay the bills and default on its obligations if the debt ceiling is not raised by June 5.
The ultimate agreement, hammered out by Biden, McCarthy and a small group of their deputies, is a two-year budget deal that would essentially hold spending flat for 2024, while boosting it for defense and veterans, and capping increases at 1% for 2025. It would suspend the debt limit until January 2025, after the next presidential election. Republicans had insisted on reducing spending and had passed their own bill with much larger cuts last month.
The package would also make policy tweaks, including by adding work requirements for some food aid recipients and streamlining an environmental law that Republicans say has made it harder to build energy projects.
Takeaways from the deal, and from the negotiations that led up to it:
McCARTHY’S DELICATE BALANCING ACT
Ever since McCarthy won the House speakership on the 15th ballot in January, it was clear that the debt ceiling negotiations would be his first and perhaps biggest test.
Known more for strategy than policy, McCarthy has had a challenge that seemed almost insurmountable, with a narrow majority and a sizable group of hard-right conservatives certain to oppose anything he negotiated with Biden. And he could still find himself in the middle of a crisis if too many in his caucus revolt when the House votes on the package this week.
Through it all, the Californian has exhibited his typical laid-back vibe, projecting confidence about the bill and its success. He said Sunday that he will win a majority of Republicans on the bill and some Democrats.
