After the Treasury Department warned of a June 5 default, Democratic President Joe Biden and a Republican negotiator said Friday they were working on an agreement to raise the U.S. government’s $31.4 trillion debt ceiling.
Republicans have been pushing for deep budget cutbacks while negotiating to lift the federal government’s self-imposed borrowing ceiling for weeks. Without an agreement, the U.S. might default catastrophically.
“Things are looking good,” Biden told reporters. “I’m optimistic.”
Republican Representative Patrick McHenry agreed with Biden but cautioned that conversations were ongoing.
“I’m hopeful,” said McHenry, one of House Speaker Kevin McCarthy’s top White House negotiators. “But we have to make sure we have a line on tax, we have a line on agreement – there’s significant challenges ahead.”
THE TWO SPOKE SEPARATELY after U.S. Treasury Secretary Janet Yellen announced that the country would run out of money on June 5. The new projection gave more time but a stiffer deadline than Yellen’s June 1 prediction.
Negotiators contemplate a two-year limit lift but disagree on tightening work requirements for some anti-poverty programs.
CNN claimed that McCarthy left the Capitol on Friday after a conference call in which a top aide warned Republicans no compromise had been reached.
Before Biden could sign a deal, the Republican-controlled House and Democratic-led Senate would have to approve it, which might take weeks.
A U.S. official said negotiators have tentatively agreed to curb spending on numerous government programs next year.
Safety-net programs persisted. Lead Republican negotiator Garret Graves said his party would not withdraw its demand that more people work. “No way. Graves told reporters no.
Biden and Democrats have opposed Republican efforts to force childless persons under 56 to work or look for jobs to qualify for Medicaid and SNAP.
Republicans would force more program beneficiaries to work or look for work. The impartial Congressional Budget Office estimates it would save $120 billion over ten years but remove over a million Americans from those programs.
Democrats say the idea will increase red tape and disqualify qualified applicants.
After rapidly rising during the COVID-19 outbreak, Medicaid and SNAP have decreased. Biden opposes Medicaid work requirements, which covered 85 million Americans in January.
According to the anonymous person, the plan would boost military and veterans care funding while maintaining non-defense discretionary expenditure at current levels.
The pact may cut funds for the IRS, which received $80 billion last year to increase enforcement and tax revenue. Republicans want that funding revoked.
The official said the White House is trying to keep targeting rich taxpayers.
The Treasury Department had already warned that it could not meet all its responsibilities by June 1.
Several credit-rating agencies have stated they are considering downgrading the U.S., which would raise borrowing rates and weaken its role as the global financial system’s backbone.
S&P downgraded U.S. debt after a 2011 dispute.
Even if they achieve a deal, leaders from both parties must work hard to win congressional approval. Democrats oppose the new job requirements for social programs, but right-wing Republicans insist on severe spending cuts.
Most legislators have left Washington for Memorial Day, but House leaders have encouraged them to return for voting when an agreement is reached.
House leaders have promised three days to consider the deal before voting. After that, any senator can stall action for days. Republican Mike Lee has threatened.
