White House and GOP sign debt limit deal to avoid default

Top White House negotiators and Republicans reached an agreement in principle on Saturday to raise the debt limit for two years while cutting and capping some government spending over the same period, a breakthrough after a marathon series of crisis talks that have swept the country. within days of it being the first bankruptcy in history, three people familiar with the deal said.

Congressional approval of the plan before June 5, when the Treasury is expected to exhaust its ability to pay its obligations, was not assured, especially in the House. Republicans have a slim majority in the chamber, and right-wing lawmakers who had demanded significantly bigger cuts in exchange for lifting the loan limit are almost certain to revolt.

But the compromise, which would effectively freeze federal spending on track to grow, had the blessing of both President Biden and speaker Kevin McCarthy, raising hopes that it could break the fiscal stalemate that Washington and the nation have already been in. weeks in its grip and threatened an economic crisis. The two spoke by telephone on Saturday evening to resolve the final bottlenecks.

The people who spoke about the deal did so on condition of anonymity as they were not authorized to comment publicly prior to a formal announcement.

It was structured with the aim of luring votes from both parties, although it would most likely draw the wrath not only of conservative Republicans, but Democrats who are outraged at being asked to vote for cuts they oppose, with the threat of pending default. Still, it allows Republicans to say they managed to cut some federal spending — even if funding for the military and veterans programs continued to grow — while Democrats can say they have spared most domestic programs from significant cuts.

This is an evolving story. Check back later for updates.