President Biden and House Speaker Kevin McCarthy reached an agreement in principle to avoid a potentially disastrous government default and raise the nation's debt ceiling.
The deal follows weeks of negotiations and a tense creep toward a deadline to raise the government's borrowing limit. The final package is expected to have opponents on the extremes of both parties, but the announcement Saturday indicates that Republican and Democratic leaders believe they will gain enough bipartisan support to pass the legislation.
The proposal holds nondefense spending for fiscal year 2024 at roughly current levels and raises it 1% in 2025, according to a source familiar with the negotiations. The agreement separately raises the debt limit for two years.
McCarthy plans to put the measure to a vote in the House chamber as early as next Wednesday.
"After weeks of negotiations, we have come to an agreement in principle," McCarthy said speaking in the U.S. Capitol. "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."
According to a source familiar with the talks, the deal protects tens of billions of dollars for clean energy, rebates and clean-up efforts for harmful pollutants from oil and gas.
Despite repeatedly indicating that increasing the number of people subject to work requirements for federal assistance programs was a red line in negotiations, Biden conceded to temporary increases in work reporting mandates for some elderly food stamp participants.
While the deal does not make changes to work requirements for Medicaid recipients as Republicans initially proposed, it does include a compromise focused on increasing the number of food stamp recipients who are subject to work requirements.
The bill would raise the age of food stamp recipients who would be subject to work requirements from 50 to 54. However, there are special protections for veterans and people who are homeless. All of those changes expire in 2030, though, unless they're renewed by Congress.
The Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, currently limits able-bodied adults without dependents ages 18-50 to three months of SNAP benefits during any 36-month period when they cannot show they are employed or in a work or training program for at least 20 hours a week.
President Biden also issued a statement Saturday evening saying he will "strongly urge both chambers to pass the agreement right away."
"The agreement represents a compromise, which means not everyone gets what they want," Biden said in the statement. "That's the responsibility of governing."
Biden previously insisted he wanted Congress to authorize a debt ceiling increase without any conditions. But last month House Republicans approved a bill that would raise the debt ceiling in exchange for spending cuts. GOP negotiators used that proposal as a framework for talks with the White House.
On Saturday evening, Republican leaders held a call with GOP members to unveil the details of the deal. McCarthy praised the agreement for having "historic reductions in spending," while also ensuring there would be "no new taxes, no new government programs." He added that the deal included "consequential reforms that will lift people out of poverty and into the workforce."
Key negotiators for both sides are working through the night to write the bill. McCarthy expects to have another conversation with Biden over the weekend, before posting the text of the legislation Sunday afternoon.
The breakthrough came about an hour after McCarthy and Biden spoke on the phone Saturday. Earlier in the day, Biden spoke with Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries.
On Friday, Treasury Secretary Janet Yellen updated her guidance on the so-called "X date" — when the U.S. would run out of money to pay its bills — to June 5. Previously she had said it would be as early as June 1.
The timeline to avoid a default remains tight. McCarthy has vowed that House members would get 72 hours to review any legislation before a vote. After that, the bill would head to the Senate for a vote on final passage and then to the president to sign.
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