President Joe Biden and House Speaker Kevin McCarthy have come to an agreement "in principle" to extend the debt ceiling, McCarthy confirmed Saturday night.
"I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we've come to an agreement in principle that is worthy of the American people," McCarthy said.
In brief comments to reports, McCarthy said there are some final details to go over. He said he'll speak with Biden on Sunday to finalize the proposal.
"I believe this is an agreement in principle that is worthy of the American people," McCarthy said. "It has historic reductions in spending, consequential reforms that will lift people out poverty and into the workforce, reign in government overreach. There are no new taxes, no new government programs."
McCarthy said he hopes to have the final text of the bill released on Sunday and plans to bring the agreement to a vote on Wednesday. It will also need approval from the Democratic-led Senate before President Biden signs it.
Earlier Saturday evening, President Biden confirmed he talked with McCarthy, as well as Senate Minority Leader Mitch McConnell and House Minority Leader Hakeem Jeffries.
"It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone," Biden said in a statement. :And, the agreement protects my and Congressional Democrats’ key priorities and legislative accomplishments. The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing."
A bill still needs to be drafted and voted on by both the House and Senate. Had the U.S. reached its debt limit, the government would not have been to pay its bills fully. Experts warned this would result in disastrous consequences for the economy.
Both parties had drawn a line in the sand on how to address the debt ceiling. Democrats have insisted on a bill that just addresses the debt limit. McCarthy said Republicans want to include spending cuts on non-discretionary programs.
Congress going home for Memorial Day weekend amid debt limit crisis
House leadership told lawmakers that they should be ready to return within 24 hours if a deal on the debt limit is reached.
Among the cuts were changes to a number of social programs. For instance, McCarthy pushed for additional work requirements for those to receive Supplemental Nutrition Assistance Program food benefits. McCarthy has proposed cuts to Medicaid, which the Congressional Budget Office estimates would increase the number of uninsured Americans by 600,000. He would also change the administration’s rule on income-driven student loan repayments, raising monthly payments for many borrowers.
Treasury Secretary Janet Yellen had said the U.S. would enter a default as soon as June 1. She then revised her estimation to June 5.
The Treasury says the U.S. debt limit is “the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.”
Yellen has warned that the U.S. exceeding its debt limit could cause a disruption to things like Social Security payments.
There is broad agreement among lawmakers that exceeding the debt limit would have dire consequences for the U.S. economy. Yellen claimed that even waiting to the minute would cause problems.
On Saturday, McCarthy said there had been progress in his talks with the White House.
McCarthy had previously said he would give his caucus three days to review the bill before bringing it to a vote.
