President Joe Biden and House Speaker Kevin McCarthy reached an "agreement in principle" to raise the nation's legal debt ceiling, but now Congress must rush to approve the spending cuts package in a matter of days to avert a potentially disastrous U.S. default.
The Democratic president and Republican speaker reached the agreement after the two spoke Saturday evening by phone. The country and the world have been watching and waiting for a resolution to a political standoff that threatened the U.S. and global economies. With the outlines of a deal in place, the legislative package could be drafted and shared with lawmakers in time for House votes as soon as Wednesday, and later next week in the Senate.
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 the 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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