US debt deal finalized

Biden, McCarthy confident of Congress nod

WASHINGTON (AFP) – US President Joe Biden and Republican leader Kevin McCarthy said Sunday that a final bipartisan deal to raise the US debt ceiling – and avoid a cataclysmic default – now heads to Congress, which will need to pass the agreement before the government starts running out of money.

The compromise after weeks of intense talks offers a path back from the precipice, even as the clock is still ticking down to the June 5 “X-date” when the Treasury estimates there might not be enough cash to pay bills and debts.

“I think it’s a really important step forward,” Biden said in a brief appearance before media at the White House, urging “both chambers (of Congress) to pass that agreement.”

“It takes the threat of a catastrophic default off the table, protects our hard-earned and historic economic recovery, and... represents a compromise that means no one got everything they want,” Biden added.

The White House said Biden and McCarthy spoke earlier in the day as they struggled to avert a financial precipice, which threatened to throw millions of people out of jobs and risk a global meltdown.

McCarthy, for his part, voiced optimism that the bipartisan deal could get through Congress despite skepticism from some lawmakers on both sides of the aisle.

In a statement later Sunday, the speaker and other Republican congressional leaders touted the agreement as a “historic series of wins.”

McCarthy has summoned lawmakers from the House of Representatives back to Washington from a holiday recess to vote on the deal on Wednesday.

The basic framework of the deal suspends the federal debt ceiling, currently $31.4 trillion, for two years – just enough to get past the next presidential election in 2024 and allow the government to keep borrowing money and remain solvent.

In return, the Republicans secured some limits on federal spending over the same period.

Congressional opposition to the bill comes from an unlikely union of hard-right Republicans who wanted deeper spending cuts and progressive Democrats who wanted no reductions at all.

McCarthy’s wafer-thin majority in the House means passing the bill will require significant Democratic backing to balance out Republican dissent.

The speaker was out pushing the deal Sunday, arguing on the Fox network that the spending limits were a significant victory and insisting that 95 percent of House Republicans were “very excited.”

By Sunday evening, the 99-page proposal was released publicly, available for scrutiny by lawmakers before the vote.

Top Republican Senator Mitch McConnell called on his own chamber – controlled by Democrats – to “swiftly pass this agreement without unnecessary delay.”