Biden, McCarthy Reach Agreement on Deal to Increase US Debt Ceiling

WASHINGTON — U.S. President Joe Biden and House Speaker Kevin McCarthy reached an agreement Sunday for a deal to increase the government’s borrowing limit and are urging Congress to approve the legislation to avoid a first-ever default.

However, progressive Democratic lawmakers from the party’s ideological left and right-wing Republicans immediately voiced opposition Sunday to the deal agreed to by the two leaders.

Speaking from the White House Sunday evening, Biden said the deal was “good news” and urged congressional lawmakers to pass the bill.

“The agreement prevents the worst possible crisis, a default, for the first time in our nation’s history,” he said. It “takes the threat of a catastrophic default off the table.”

McCarthy, discussing the agreement at the Capitol, said, “At the end of the day, people can look together to be able to pass this.”

Answering a reporter’s question, the president replied that House Speaker McCarthy negotiated in good faith, but there is still the question whether the Republican leader has enough support in his own party for the agreement’s passage.

“And I have no idea whether he has the votes, but I suspect he does,” Biden said.

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“The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing,” Biden said in a statement. He called the pact “an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone.”

He said, “The agreement protects my and congressional Democrats’ key priorities and legislative accomplishments. And this agreement is good news for the American people, because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost.”

Earlier Sunday, McCarthy, on the “Fox News Sunday” show, said that from Republicans’ perspective, “There’s so much in this that is positive. It will not do everything for everyone, but this is a step in the right direction.”

“I think you are going to get a majority of Republicans voting for this bill,” McCarthy said. While acknowledging some conservative pushback, “We were able to do this when the president said he wasn’t even going to talk to us.

Not all details of the “agreement in principle” that Biden and McCarthy reached late Saturday were publicly known early Sunday. White House officials and McCarthy’s negotiators from the Republican majority in the House of Representatives were fine-tuning the text of the legislation Congress will need to pass to suspend the country’s existing $31.4 trillion debt ceiling to an unspecified figure nearly two years from now in the first quarter of 2025, months after the November 2024 presidential election.

The debt ceiling needs to be increased so the government can borrow more money, or the U.S. government will run out of cash to pay its existing bills June 5, Treasury Secretary Janet Yellen has warned Congress.

Yellen has said that without an increase in the debt ceiling or a suspension of the borrowing limit, interest on U.S. bonds held by foreign governments and individual American investors would be imperiled, as well as stipends to U.S. pensioners and salaries to government workers and contractors. Without enough tax receipts coming into U.S. coffers to pay its bills, the government would be forced to prioritize which payments to make.