The White House and congressional Republicans are finalizing an agreement Friday that will increase the U.S. government’s $ 31.4 trillion debt ceiling by two years while limiting spending on everything but military and veterans, a U.S. official said.
Democratic President Joe Biden’s negotiators and House Speaker Kevin McCarthy appeared to reach an agreement on Thursday as both sides reached agreement on key points, such as spending caps and funding for the Internal Revenue Service (IRS) and the military.
However, issues such as work requirements for recipients of federal aid still held back the agreement, the official said.
The envisaged agreement would increase funding for discretionary spending for military and veterans, while non-defensive discretionary spending would remain essentially at current year levels, said the official, who requested anonymity because he is not authorized to speak on internal discussions.
The White House is considering scaling back its plan to increase funding from the IRS to hire more controllers and target wealthy Americans, the official said.
The funding for defense and Veterans Affairs matches the budget Biden announced earlier this year, according to a second U.S. official.
The agreement leaves many details to be worked out in the coming weeks and months.
Each of them will have to persuade enough members of his party in the narrowly divided Congress to vote for an eventual deal, which is no mean feat as far-right Republicans say they won’t support a deal without sweeping budget cuts and progressive Democrats oppose new work requirements for poverty alleviation.
“The only way to make progress is a two-party agreement. And I believe we will come to an agreement that allows us to move forward and that protects the hard-working Americans of this country,” Biden said Thursday.
One of the Republican negotiators, Representative Patrick McHenry, said that both sides have expressed their concerns and that they understand them very well.
“Therefore, at the eleventh hour, we are still fighting over serious matters of great importance here,” he told reporters late Thursday.
What has made the matter even more complicated is that it is unclear how long the Legislature has left to act. The Treasury Department had been warned that it might not be able to meet all of its obligations as early as June 1, but said Thursday it would sell for $ 119 billion in debt expiring on that date, suggesting to some market watchers that it was not an unwavering deadline.
Most lawmakers have left Washington for the Memorial Day holiday, but their leaders have warned them to be ready to return for votes when an agreement is reached.
The fast-growing health and retirement programs would not be affected, even though they are expected to drive up U.S. debt in the coming years.
Republicans have rejected Biden’s proposed tax increases for businesses and the wealthy, while Biden has opposed Republican proposals to tighten work requirements in some poverty alleviation programs and relax oil and gas drilling rules.
Republican negotiator Garret Graves said late Thursday that the White House” refuses to negotiate work requirements, “which he called” insane.” He said disagreement over social security funding and Medicare versus work requirements remains a point of contention between the two sides.
House leaders have said that lawmakers will be given three days to think about the agreement before a vote is taken, and that each individual legislator in the Senate will have the ability to hold the action for days. At least one of them, Republican Mike Lee, has threatened to do so.
The impasse has worried investors, raising the government’s financing costs by $ 80 million to date, according to Deputy Finance Minister Wally Adeyemo.
Several credit rating agencies have said they have considered the United States for a potential cut, which would increase financing costs even further.
About the author: Christy Olsen
Christy Olsen, a young author who followed in her father's footsteps and took up journalism at school. She often introduces a lot of subjective things into his texts, always tries to state the essence and give a proper assessment.