Amid growing fears of a possible default by early June, US President Joe Biden and Republican Kevin McCarthy have reportedly reached an “agreement in principle” to raise the federal government’s debt ceiling of $31.4 trillion.
According to May 28 a report From Reuters, citing two sources familiar with the negotiations, the “interim” deal was reached after a 90-minute phone call between Biden and McCarthy on May 27.
It was reported that while “exact details of the deal were not immediately available,” an agreement was reached to limit US government spending for the next two years, except for expenditures related to national security.
“The negotiators agreed to put an end to discretionary non-defense spending at 2023 levels for a period of two years, in return for increasing the debt ceiling during a similar period,” the sources stated.
While it was reported that the White House and House Republican negotiators “reached an agreement in principle” in an effort to avoid default, one source reportedly said there were still some components of a deal to be finalized, noting:
“But I’m not sure it’s all sorted out. It might be a little thing or two that needs to be finalized. But soon enough to move on.”
It was reported that the deal would prevent an “economically shaky default”. And it was confirmed that the deal would have to pass through Congress before it would “run short of money from the Treasury” – which it was recently warned would happen on June 5 if the debt ceiling was not raised.
This is a developing story, and more information will be added as it becomes available.