White House and House Republicans rush to finalize debt limit deal

The White House and House Republicans hurried Friday to finalize a deal on government spending that would avert an unprecedented default on the US debt and lift a huge cloud of uncertainty over the country’s economy.

Negotiators for US President Joe Biden and Republican House Speaker Kevin McCarthy were meeting virtually on Friday and talking by phone to settle remaining sticking points in a possible agreement.

People close to both parties have said they are inching closer to a deal that would extend America’s borrowing limit for two years until after the 2024 general election, while setting a cap that would limit spending growth over the same time period. Will stop

“I’m going to try as hard as I can to get this done, make more progress today and end the journey. I’m the absolute optimist,” McCarthy said as he entered the Capitol Friday morning. “It really does come down to one thing: It’s about spending. Democrats never want to cap the amount of spending.

Earlier in a CNN interview, Deputy US Treasury Secretary Wally Adeyemo echoed the upbeat tone: “What I can say is that we are making progress and our goal is to make sure we get a deal because Default is unacceptable.”

He said: “The President has said it, and the Speaker has said it. And we have to do something before the beginning of June when the secretary has said that it is highly likely that we will no longer have the resources to pay our bills.

The urgency to get the deal done was heightened after US Treasury Secretary Janet Yellen warned there could be a possible default as early as June 1. Once a deal is struck, any Republican-controlled legislation could take several days to approve. House of Representatives and the Democrat-controlled Senate before being enacted into law by Biden.

Voting in the closely divided House will be especially tricky because rank-and-file Republican and Democratic lawmakers have already expressed dissatisfaction with the emerging deal.

In addition to setting spending limits for the next two years, the potential agreement would also include new work requirements for some Social Safety Net programs, legislation to expedite allowing large investments and a smaller one for the Internal Revenue Service. The rich will be accounted for to promote wealth. taxpayers.

An agreement, if successfully enacted, would eliminate a major source of risk for the US economy and financial markets, which are already reeling from banking sector turmoil and the effects of higher interest rates to stoke inflation. are struggling.

Talks to resolve the fiscal crisis only moved into higher gear in recent weeks, forcing Biden to cut short a trip to Asia to follow the talks directly in Washington. Even though a deal was getting closer, it was not certain it could be finalized by late Friday, meaning talks could stretch into the long Memorial Day weekend in the US.

US stocks were higher, with the S&P 500 up 1 percent in morning trade, on reports of progress in debt ceiling talks. Treasury yields continued to rise in the morning after stronger-than-expected economic data as investors hoped the US government could avoid default.

Additional reporting by Peter Wells in New York