Biden, Republicans Reach Debt Ceiling Deal But Congress Must Approve To Prevent Dire Default | Wagon Radio 720

WASHINGTON (AP) – President Joe Biden and House Speaker Kevin McCarthy have reached an “agreement in principle” to raise the nation’s legal debt ceiling, but now Congress is facing a potentially dire crisis for the United States. To avoid it, we need to rush to approve spending cuts within days. Default.

The deal risks drawing the ire of both Democrats and Republicans as lawmakers begin to unveil concessions to a compromise on Sunday. Negotiators agreed with some Republican demands for increased labor requirements for food stamp recipients, which caused an uproar from House Democrats as nonparticipants. But it fell short of the drastic overall spending cuts that Republicans had hoped for.

It will need the support of both parties to get congressional approval before the government’s expected default on US debt on June 5.

The Democratic president and the Republican chairman met on the phone Saturday night and reached an agreement. The nation and the world are watching and awaiting resolution of the political conflicts that threaten the United States and the global economy.

“Agreement means compromise, which means not everyone gets what they want,” Biden said in a statement late Saturday night. “That’s the ruler’s responsibility,” he said.

Biden said of the deal, “It’s good news for the American people because it prevents what could have been a catastrophic default that would have led to an economic depression, destroyed retirement accounts and the loss of millions of jobs.” said.

“We still have a lot of work to do,” McCarthy said in a brief speech at the Capitol.

But the Republican chairman said, “I believe this is an agreement in principle that the American people deserve.”

With the deal outlined, a legislative package could be drafted and shared with lawmakers in time for a House vote as early as Wednesday and a Senate vote later next week.

At the heart of the policy is a two-year budget deal that would raise the debt ceiling for two years, leave spending unchanged in 2024 and increase it by 1% in 2025, and postpone political volatility until the next presidential election. It’s what you do.

Republicans pushed hard for an agreement to impose harsher working conditions on government aid recipients, achieving some of what they wanted, but not all. The deal would raise the current working age requirement for able-bodied adults without children from 49 to 54, but allowed Biden to secure exemptions for veterans and the homeless.

The two countries also agreed to an ambitious review of federal permits to facilitate the development of energy projects. Instead, the agreement will implement landmark amendments to the National Environmental Policy Act of the 1970s designating a “single lead agency” to produce environmental reviews, in hopes of streamlining the process. .

The deal comes after Treasury Secretary Janet Yellen told Congress that the U.S. could default by June 5, four days later than previously expected, if lawmakers don’t act in time. It came together after speaking to Congress. Removing the country’s debt ceiling, which currently stands at $31 trillion, would allow the country to borrow even more to pay the bills it already incurs.

Biden also met with Democratic leaders in Congress earlier in the day to discuss the status of talks. White House officials plan to brief House Democrats in a video call on Sunday.

McCarthy holds a tiny Republican majority in the House, backed by far-right conservatives who may resist poor agreements aimed at cutting spending. But compromising his vote wins with the Democrats risks losing his popular support, and the new chair will face a challenging career.

Both sides have suggested that one of the major impediments was the Republican effort to expand labor requirements for recipients of food stamps and other federal aid programs, a long-standing Republican goal. has been strongly opposed by Democrats. The White House said the Republican proposal was “cruel and pointless.”

Biden said Medicaid labor requirements are not a start. He appeared potentially open to negotiating changes to food stamps, now known as the Supplemental Nutrition Assistance Program (SNAP), despite opposition from Democratic lawmakers.

The American people and the world watched with trepidation at a policy on the brink of negotiation that could throw the U.S. and world economies into turmoil and undermine global confidence in the country’s leadership.

With their next Social Security payment coming up next week, anxious retirees were already making contingency plans for leaked checks.

Missing action by the new deadline “would cause serious hardship for American families, undermine our global leadership position, and call into question our ability to defend our national security interests,” Yellen said. rice field.

Any deal would require a political compromise in a divided parliament. Many far-right Trump Republicans in Congress have long been skeptical of the Treasury Department’s prospects and are pressuring Mr. McCarthy to hold out.

Lawmakers aren’t expected to return to work over Memorial Day weekend by Tuesday at the earliest, and McCarthy will follow the rule of submitting any bill to lawmakers 72 hours before a vote. I promised.

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Associated Press reporters Stephen Groves, Fatima Hussain, Farnoush Amiri, Sungmin Kim and video journalist Rick Gentilo contributed to the report.