House Republicans Reach Tentative Deal with White House to Address Debt Limit

WASHINGTON — House Republicans reached a tentative deal with the White House on Saturday night to address the nation’s borrowing limit and avoid a catastrophic default on U.S. sovereign debt, Speaker Kevin McCarthy confirmed.

Agreement in Principle Reached

“We have come to an agreement in principle,” McCarthy said Saturday in the Capitol. “We still have a lot of work to do, but I believe this is an agreement in principle that’s worthy of the American people.”

McCarthy said he spoke to President Joe Biden twice on Saturday about the plan. “I expect to finish the writing of the bill, checking with the White House and speaking to the president again tomorrow afternoon,” said the California Republican, “Then posting the text of it tomorrow, and then be voting on it on Wednesday.”

Historic Reductions in Spending with No New Taxes

The deal “has historic reductions in spending, consequential reforms that will lift people out of poverty and into the workforce, and rein in government overreach,” McCarthy said. “There are no new taxes and no new government programs.”

Democrats Yet to Confirm or Deny

Democrats did not immediately confirm or deny McCarthy’s description of the agreement, which comes after more than a week of urgent talks between negotiators for the White House and House Republicans.

Lobbying Blitz Commences Ahead of Vote

The announcement marked the start of a lobbying blitz by House and Senate leaders in both parties to convince their members to vote for the package, which will need to win enough votes in the GOP-controlled House and Democratic-held Senate to raise the U.S. debt ceiling in time to meet a June 5 deadline.

Resistance from Ultraconservative Members

At least one senator, Utah Republican Mike Lee, has already threatened to use procedural maneuvers in the Senate to hold up a debt ceiling bill for as long as possible if he doesn’t like what it contains.

In the House, a group of 35 ultraconservative members publicly pressured McCarthy to demand even more concessions from Democrats and to “hold the line.” They, too, indicated they would not support a deal that they thought gave too much away.

Treasury Department Guidance Informs Updated Deadline

The final push on the deal took place Saturday, in spite of updated guidance from the Treasury Department on Friday afternoon which identified June 5 as the debt default deadline.

That is five days later the previous Treasury guidance of June 1, and the update was taken by some members of Congress as meaning there would be additional time for negotiations.

In announcing the June 5 date, Treasury Secretary Janet Yellen explained that the agency was “scheduled to make an estimated $130 billion of payments and transfers” during the first two days of June. This would “leave Treasury with an extremely low level of resources.”

The week of June 5, Treasury will owe “an estimated $92 billion of payments and transfers,” Yellen wrote in a public letter to House Speaker Kevin McCarthy.

Unless the debt limit were raised in time and the government was allowed to borrow more, “Our projected resources would be inadequate to satisfy all of these obligations.”

Vote Does Not Authorize Additional Spending

A vote to raise the debt limit does not authorize additional government spending. It merely permits the Treasury to meet obligations that were already approved by Congress in the past, some of them, decades ago.

Nonetheless, many Republicans have come to view the biennial vote to raise the debt limit as an opportunity to extract concessions from Democrats in exchange for their votes to avoid a debt default.

Tough Terms in Closing Hours

“It’s not over. We’re not done. But we’re within the window of being able to perform this and we have to come to some really tough terms in these closing hours,” GOP negotiator Rep. Patrick McHenry of North Carolina told reporters late Friday afternoon.

McHenry said he appreciated the additional guidance from Yellen, calling the Treasury secretary “a woman of principle” who had been “very respectful” of Republicans throughout the months long debt ceiling standoff.

“In many respects, it’s an answer to what House Republicans were questioning about the X date. Now we know, and this puts additional pressure on us.”

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