Emerging debt limit deal would cut spending by less than GOP demanded – reports
The deal Joe Biden and Kevin McCarthy’s negotiators are closing in on would satisfy the GOP’s demand that government spending be reduced, but by less than initially proposed, the Washington Post and New York Times report.
Spending on defense and veterans programs would be allowed to rise, while expenditures on every other aspect of government would be cut under the deal – but replaced by money removed from funding the Internal Revenue Service (IRS) and other government offices, according to the reports. That would be a much less drastic outcome than the bill Republicans passed last month that would have put government spending back at where it was in the 2022 fiscal year, and rescinded $80bn apportioned to the IRS in the Inflation Reduction Act to help improve its services and crack down on tax cheats.
If the new deal holds, it looks to be typical of the sorts of compromises Democrats and Republicans in Washington reach. McCarthy could claim he forced the president to cut spending, while Biden could tell his allies he protected his signature legislative accomplishments.
Key events
Here’s more from the Guardian’s Joan E Greve on the debt ceiling talks and the deal that may be taking shape:
Joe Biden and Republican lawmakers on Thursday appeared to be nearing a deal to cut spending and raise the debt ceiling, with little time to spare to avoid a potential default that could wreak havoc on the economy and global markets.
The deal under consideration by negotiators would raise the government’s $31.4tn debt ceiling for two years while capping spending on most items, a US official told Reuters. It would also increase funding for discretionary spending on military and veterans while essentially holding non-defense discretionary spending at current year levels, the official said.
The agreement would specify the total amount the government could spend on discretionary programs including housing and education, according to a person familiar with the talks. The two sides, who met virtually on Thursday, are just $70bn apart on a total figure that would be well over $1tn, according to another source.
Emerging debt limit deal would cut spending by less than GOP demanded – reports
The deal Joe Biden and Kevin McCarthy’s negotiators are closing in on would satisfy the GOP’s demand that government spending be reduced, but by less than initially proposed, the Washington Post and New York Times report.
Spending on defense and veterans programs would be allowed to rise, while expenditures on every other aspect of government would be cut under the deal – but replaced by money removed from funding the Internal Revenue Service (IRS) and other government offices, according to the reports. That would be a much less drastic outcome than the bill Republicans passed last month that would have put government spending back at where it was in the 2022 fiscal year, and rescinded $80bn apportioned to the IRS in the Inflation Reduction Act to help improve its services and crack down on tax cheats.
If the new deal holds, it looks to be typical of the sorts of compromises Democrats and Republicans in Washington reach. McCarthy could claim he forced the president to cut spending, while Biden could tell his allies he protected his signature legislative accomplishments.
Debt ceiling compromise reportedly at hand — but passing it is another matter
Good morning, US politics blog readers. It looks like negotiators for Joe Biden and Republican speaker of the House Kevin McCarthy are getting close to agreeing on an outline of a deal to raise the debt ceiling through the 2024 in exchange for cutting some government spending, according to reports that emerged yesterday. That’ll quell fears that the standoff could lead to the US government defaulting on its debt for the first time in history sometime around 1 June, and likely wreck the economy. But McCarthy and Biden are only two men – powerful men yes, but there are 100 senators and 435 House representatives who must decide whether to vote for whatever deal they agree to or not. Expect to hear plenty from them as the agreement is fleshed out.
Here’s what else is happening today:
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Unable to borrow any money, the US government’s cash balance dipped to $49.5bn on Wednesday – less than 24 billionaires, Bloomberg reports.
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The House and Senate are holding only brief sessions today, but House lawmakers are on 24-hour notice to come back to Washington during the Memorial Day holiday weekend to vote on the debt limit deal.
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Biden welcomes NCAA champions the Louisiana State University Tigers women’s basketball team to the White House at 2pm eastern time, and NCAA men’s basketball champions the University of Connecticut Huskies at 5pm.