WASHINGTON - WASHINGTON - Key negotiators reached an agreement in principle on Saturday night to extend debt ceilings and avoid a catastrophic default. This was just days before Treasury Department warned that the U. S. may run out of money.
The deal comes after weeks of negotiations between President Joe Biden, Speaker Kevin McCarthy, and the GOP. The GOP demanded that spending be cut in exchange for the nation's ability to pay its bills.
McCarthy told reporters outside of his Capitol office that "we still have work to do tonight" to finish the writing. He added that he expected to post the text Sunday and hold a House voting on it on Wednesday.
A source familiar with the deal said that it included a two-year appropriations agreement and a debt limit extension of two years, effectively resolving this issue until the 2024 elections. The Supplemental Nutrition Assistance program, or SNAP will include work requirements to receive federal aid. This is for Americans under the age of 54. There are exceptions for veterans and homeless people. The source said that Medicaid will not be affected.
By averting this crisis, the White House would avoid a first-ever bankruptcy that threatens to destroy millions of jobs and devastates the American economy. This would shake faith in Biden's management, and the divided Congress, as he embarks on his re-election campaign.
On Saturday, top Republicans were in and out of Speaker's Office as negotiations continued. Some of the talks took place virtually and over the phone. Shalanda Young, a White House negotiator, was in Louisiana for graduation remarks at Xavier University. She joked that the two-hour lunch break was the "most fun I've ever had in two weeks."
Conservatives who were critical of the Republican leadership threatened to block the bill if Speaker Boehner struck a deal that did not reduce spending. One outside adviser warned of a "trench war" to come.
McCarthy said recently that he would give members 72 hours to review the text prior to a vote on the floor. Mike Lee, R. Utah, has threatened to block any quick vote in the Senate if he's not satisfied with the terms. This could mean that the chamber would have to jump through many procedural hoops to vote.
The extension of the debt ceiling does not authorize new spending in the future. It allows the U. S. government to pay off existing debts, which both parties have accumulated through years of demands for increased spending on domestic programs and military programs as well as reduced taxes.
McCarthy's and the White House's negotiation staff held back-to back sessions of negotiations, some lasting late into the evening before they were resumed. The Republican push for adding work requirements to social security net programs remained a major obstacle until the very end.
By the time a settlement was announced on Saturday, Democratic anxiety had been reduced to a low simmer. Biden's low profile in the talks caused some Democrats to be concerned that the president was ceding control of the messaging war.
The calls for Biden to use his bully pulpit to convince voters to support a bill that made deep concessions next year reached a fever pitch. Vice President Kamala Harris had also kept a low profile, despite the fact that she had joined the talks in public a week earlier, before leading a glitchy Zoom conference call.