Biden, GOP reach debt-ceiling deal, now Congress must approve it to prevent calamitous default

ExpandHouse Speaker Kevin McCarthy of Calif., speaks during a news conference after President Joe Biden and McCarthy reached an"agreement in principle" to resolve the looming debt crisis on Saturday, May 27, 2023, on Capitol Hill in Washington. Rep. Patrick McHenry, R-N.C., a key Republican in the debt limit negotiations and chairman of the House Financial Services Committee, back right, and Rep. Garret Graves, R-La., McCarthy's top mediator in the debt limit talks, left, look on.

“The agreement represents a compromise, which means not everyone gets what they want,” Biden said in a statement late Saturday night. “That’s the responsibility of governing,” he said. Central to the package is a two-year budget deal that would hold spending flat for 2024 and increase it by 1% for 2025 in exchange for raising the debt limit for two years, pushing the volatile political issue past the next presidential election.

The deal came together after Treasury Secretary Janet Yellen told Congress that the United States could default on its debt obligations by June 5 — four days later than previously estimated — if lawmakers did not act in time. Lifting he nation's debt limit, now at $31 trillion, allows more borrowing to pay the nation's already incurred bills.

Both sides have suggested one of the main holdups was a GOP effort to expand work requirements for recipients of food stamps and other federal aid programs, a longtime Republican goal that Democrats have strenuously opposed. The White House said the Republican proposals were “cruel and senseless.” Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due next week.

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