Biden and McCarthy reach agreement to raise debt limit

WASHINGTON – With several days to spare before the United States incurs its first-ever government default, President Joe Biden and House Speaker Kevin McCarthy reached an agreement Sunday to raise the nation’s debt limit as they try to secure enough Republican and Democratic votes in Congress to pass the measure in the next week.

The Democratic chairman and the Republican congressman spoke Sunday night as negotiators scrambled to draft and release the text of the bill so lawmakers could review compromises that neither the far right nor the left is likely to support. Instead, Biden and McCarthy are working to win the backing of the political center as Congress races toward a vote before the June 5 deadline to avoid a catastrophic federal default.

“Good news,” Biden declared Sunday night at the White House.

“The agreement averts the worst possible crisis, a default, for the first time in our nation’s history,” he said. “It removes the threat of a catastrophic default.”

The president urged members of both parties in Congress to unite for swift passage.

“The speaker of the lower chamber and I made it clear from the beginning that the only way forward was a bipartisan agreement,” he said.

The pact unveiled Saturday night includes spending cuts, but risks causing discomfort among some lawmakers as they take a closer look at concessions. Biden told reporters at the White House after returning from Delaware that he was confident the plan would reach his desk.

McCarthy also sounded confident during his remarks on Capitol Hill.

“At the end of the day, people can come together to be able to pass this.”

The next few days will determine whether Washington is again able to avoid a default on the federal debt, as it has on several previous occasions, or whether the global economy enters a potential crisis.

In the United States, a default could cause markets to freeze and trigger an international financial crisis. According to analysts, millions of jobs would be lost, credit and unemployment rates would skyrocket, and a stock market crash could wipe out trillions of dollars in household wealth. It would virtually destroy the $24 trillion market for Treasury Department debt.

Worried retirees and others were already making contingency plans in case the checks didn’t arrive, with the next Social Security payments coming due soon as the world watches American leadership is at stake.

McCarthy and his negotiators described the deal as a deliverable for Republicans, though it fell far short of the broad spending cuts they sought. Senior White House officials were briefing Democratic lawmakers and calling some directly to try to drum up support.

One surprise was a major provision for influential Sen. Joe Manchin, D-West Virginia, who is providing congressional backing for the controversial Mountain Valley pipeline, a natural gas project that is sure to raise questions.

Negotiators also agreed to some Republican demands for higher work requirements for food stamp recipients that Democrats had called impossible.

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