US Debt Ceiling Countdown June 5 Deadline Approaches

US Debt Ceiling Countdown: Impending Resolution or Looming Crisis? June 5 Deadline Approaches

President Joe Biden and House Speaker Kevin McCarthy declared a "in principle agreement" to increase the nation's debt ceiling and prevent a potentially catastrophic default after weeks of discussions. The compromise contains Republican-demanded budget cuts, but it falls short of the cutbacks included in the comprehensive legislation enacted by the Republican-led House last month.To decrease expenditure, as Republicans had demanded, the proposal contains a two-year budget agreement that would freeze spending in 2024 and set spending caps in 2025. In exchange, the debt ceiling will be raised for two years, until the next election.It also increases certain job requirements for food stamp recipients and modifies an environmental legislation in an attempt to simplify the approval process for new energy projects.

Treasury Secretary Janet Yellen has stated that if lawmakers do not act to extend the federal debt ceiling by June 5, the United States will fail on its debt obligations. A look forward as Congress rushes to reach an agreement:

McCarthy told reporters late Saturday in the Capitol that the plan included "historic cuts in spending, consequential reforms that will lift people out of poverty and into the workforce, and rein in government overreach." There will be no new taxes or government programmes.""We still have more work to do tonight," he continued, "to finish all the writing of it." As midnight came, the speaker and his chief negotiators remained in his office.McCarthy stated that he would contact Biden again on Sunday. In a letter to Democratic colleagues, House Minority Leader Hakeem Jeffries of New York stated that Biden and McCarthy planned to meet by no later than 2 p.m. to finalise the agreement, and that Biden administration officials will tell House Democrats about the accord by 5 p.m.

One of the administration’s chief negotiators, presidential counselor Steve Ricchetti, was also making individual calls to Democratic lawmakers to build support, according to a House Democratic aide.Biden said in a statement that “over the next day, our negotiating teams will finalize legislative text and the agreement will go to the United States House and Senate. I strongly urge both chambers to pass the agreement right away.”The agreement is “an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone,” Biden said.

McCarthy and Biden will now have to sell the bill to their respective parties in order for it to succeed. While both parties are anticipated to lose votes, they must ensure that the agreement is popular enough to pass both chambers without a mutiny on either side. McCarthy conducted a conference call with the Republican caucus on Saturday evening, keeping his commitment to show the deal to them before releasing the legislation to the public. He stated that he plans to reveal the bill's text on Sunday afternoon.

McCarthy stated on "Fox News Sunday" that the plan is less than 150 pages long and that the House will wait 72 hours before voting on it so that it may be studied openly. "This is deserving of the American people." I'd like them to read it. "I want them to understand," he explained.Because Biden is on board, the Republican speaker anticipates a majority of Republicans to vote for it, as well as a large number of Democrats. Jeffries said on CBS' "Face the Nation" that "there will be Democratic support once we have the ability to be fully briefed by the White House, but I'm not going to predict what those numbers will ultimately look like."The response was mixed. Rep. Dan Bishop of North Carolina tweeted a vomit emoji in response to some Republicans on the call congratulating the speaker for obtaining "almost zippo in exchange" for increasing the debt ceiling.

• Both the House and Senate are expected to return on Tuesday, after Memorial Day.
• McCarthy said the House will vote Wednesday, which would then send the bill to the Senate.
• That could tie up the legislation for a few days.
• The bill could be passed by the end of the week, with a quick Biden signature to make it law.
• If all goes according to McCarthy's plan — and both chambers are able to pass the legislation — the potential crisis should be resolved by June 5, which is when the Treasury Department projects the U.S. would be at risk of default.