Late on Saturday, President Joe Biden and House Speaker Kevin McCarthy reached an “agreement in principle” as they are rushing to reach a deal to increase the debt limit ahead of the June 5 deadline.
A debt ceiling increase deal could help the U.S. avoid the possibility of defaulting, however depending on the terms of the agreements there are risks about both the Democrats and the Republicans being upset with some of the concessions that have been made in order for a deal to be reached.
The Democratic president and Republican speaker reached an agreement following a phone call on Saturday night according to Speaker McCarthy. This could potentially mean that a legislative package could be drafted and taken to the floor for a vote in the House and then the Senate as early as next week. A key part of this package is going to be a two-year budget deal that would stop any spending increases for 2024 and limit the spending increases for 2025 in exchange for the debt limit being increased until the next presidential election.
Earlier in the day Biden also spoke with Democratic leaders in Congress to discuss the progress made in the negotiations. McCarthy had similarly held a meeting with top allies behind closed doors at the Capitol as they were approaching a deal that could help the country avoid a first-ever default on the federal debt.
The discussion between the two on Saturday on the phone, came after Treasury Secretary Janet Yellen pushed the deadline for defaulting to June 5, providing them with four additional days to reach a debt ceiling increase agreement.
