WASHINGTON – Republicans in the House of Representatives reached a tentative deal with the White House on Saturday night to raise the country’s borrowing limit and avert a catastrophic default on the US government debt.
“We have reached an agreement in principle,” House Speaker Kevin McCarthy said in the Capitol on Saturday. “We still have a lot of work to do, but I believe this is a fundamental agreement worthy of the American people.”
McCarthy said he spoke to President Joe Biden twice on Saturday about the plan. “I expect to finish writing the bill, check with the White House and speak to the President again tomorrow afternoon,” the California Republican said. “Then I will publish the text tomorrow and then vote on it on Wednesday.”
The deal, he said, “includes historic spending cuts, consistent reforms that lift people out of poverty into the labor market and curb government abuses. There are no new taxes and no new government programs.”
Biden called the deal “an important step forward that cuts spending while protecting critical programs for working people and growing the economy for all.”
He also gave a taste of the White House’s arguments that House Democrats are unwilling to back a bill that at first glance appears to be a Republican victory: In short, things could have been a lot worse.
“The agreement protects key priorities and legislative accomplishments of mine and Congressional Democrats,” Biden said, adding that it “represents a compromise, which means not everyone gets what they want.”
The White House has invited all House Democrats to a virtual briefing Sunday afternoon, presumably to explain what is included in the deal and to urge Democrats to vote for it.
The announcements marked the beginning of a lobbying campaign by leaders of both parties’ House and Senate to persuade their members to vote for the package, which must win enough votes in the Republican-controlled House and Senate to raise the US debt Reach the cap in time to meet the June 5 deadline.
At least one senator, Utah Republican Mike Lee, has already threatened to use Senate procedural maneuvers to delay a debt ceiling bill for as long as possible if he doesn’t like what it contains.
In the House of Representatives, a group of 35 ultra-conservative members publicly pressured McCarthy to demand more concessions from the Democrats and “stay the line.” They also indicated that they would not support a deal that they felt gave too much away.
A vote to raise the debt ceiling does not justify additional government spending. It merely allows the Treasury Department to fulfill commitments that Congress has approved in the past, some decades ago.
Still, many Republicans see the biennial vote to raise the debt ceiling as an opportunity to wring concessions from Democrats in exchange for their votes to avoid a debt default.
This time was no different. Republicans have demanded that the White House approve a bill that included at least fundamental government spending cuts, new labor requirements for public support, energy permit reform and the cancellation of unspent Covid emergency funds.
The final push for the deal came on Saturday, although the Treasury Department presented updated guidance on Friday afternoon, setting June 5 as the default deadline.
That’s five days later than the Treasury Department’s previous forecast date of June 1. The update has been interpreted by some lawmakers as putting less pressure on negotiators as the deadline could be pushed back again.
But that’s not how leading GOP negotiator Patrick McHenry, of North Carolina, read it. She praised Treasury Secretary Janet Yellen as “a principled woman”. [who] is compliant with the law,” McHenry told reporters Friday that the new date eliminated any open questions at the time of the default. “Now we know and that puts additional pressure on us to perform,” he said.
Yellen explained that the agency “was expected to make an estimated $130 billion in payments and remittances” in the first two days of June. This would result in the Treasury being extremely short on resources.
For the week of June 5, the Treasury Department will owe “an estimated $92 billion in payments and remittances,” Yellen wrote in a public letter to House Speaker Kevin McCarthy.
If the debt ceiling is not raised in time and the government is allowed to borrow more, “our planned resources would not be sufficient to meet all of these obligations.”
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