By Moira Warburton, Diane Bartz and Idrees Ali
WASHINGTON (Reuters) -U.S. President Joe Biden said on Sunday he had finalized a budget agreement with House Speaker Kevin McCarthy to suspend the $31.4 trillion debt ceiling until Jan. 1, 2025 and that the deal was ready to move to Congress for a vote.
“This is a deal that’s good news for…the American people,” Biden told reporters at the White House after a call with McCarthy to put the final touches to a tentative deal they struck on Saturday night.
“It takes the threat of catastrophic default off the table, protects our hard-earned and historic economic recovery,” Biden said.
The deal preventing the U.S. government from defaulting on its debt – which would have been a first in history – comes after weeks of heated negotiations between Biden and House Republicans. It still needs to pass through a narrowly divided Congress before June 5, when the U.S. Treasury says it would run short of money to cover all of its obligations.
“I strongly urge both chambers to pass that agreement,” Biden said, adding he expected McCarthy to have the necessary votes for the deal to pass.
The deal has drawn fire from hardline Republicans and progressive Democrats, but McCarthy earlier on Sunday predicted he would have the support of a majority of his fellow Republicans.
The agreement would suspend the debt limit through January 1 of 2025, cap spending in the 2024 and 2025 budgets, claw back unused COVID funds, speed up the permitting process for some energy projects and include extra work requirements for food aid programs for poor Americans.
The bill would authorize more than $886 billion for security spending in fiscal year 2024 and over $703 billion in the non-security spending category for the same year, not including some adjustments, according to the text. It would also authorize a 1% increase for security spending in fiscal year 2025.
Senate Republican Leader Mitch McConnell in a statement applauded the agreement and called on the Senate to act swiftly to pass it without unnecessary delay.
“Today’s agreement makes urgent progress toward preserving our nation’s full faith and credit and a much-needed step toward getting its financial house in order,” McConnell said.
But members of the Republican hardline House Freedom Caucus said they would try to prevent the agreement from passing the House in a vote expected on Wednesday.
“We’re going to try,” Representative Chip Roy, a prominent Freedom Caucus member, said in a Sunday tweet.
McCarthy dismissed threats of opposition within his own party, saying “over 95%” of House Republicans were “overwhelmingly excited” about the deal.
“This is a good strong bill that a majority of Republicans will vote for,” the California Republican told reporters in the U.S. Capitol. “You’re going to have Republicans and Democrats be able to move this to the president.”
MCCARTHY NOT WORRIED
To win the speaker’s gavel, McCarthy agreed to enable any single House member to call for a vote to unseat him, potentially making him vulnerable to ouster by disgruntled Republicans. McCarthy said he was “not at all” concerned about that possibility.
Republicans control the House by 222-213, while Democrats control the Senate by 51-49. These narrow margins mean that moderates from both sides will have to support the bill, if the compromise loses the support of the far left and far right wings of each party.
“I’m not happy with some of the things I’m hearing about,” Representative Pramila Jayapal, who chairs the Congressional Progressive Caucus, told CNN’s “State of the Union.”
House Democratic leader Hakeem Jeffries said he expected Democratic support for the deal, but declined in an interview on CBS’s “Face the Nation” to estimate how many of his party members would vote for it.
Democratic Representative Sheila Jackson Lee, interviewed on CNN, said of the debt deal: “I am an optimist with a sense of concern” about its contents.
She praised the deal that she said would save Medicaid from benefit cuts while expanding the safety net to veterans and homeless people. “We kept the student debt responsibility that we have,” she said, referring to Biden’s policy of limited loan forgiveness.
Progressive Democrats in both chambers had said they would not support any deal that had additional work requirements for government food and healthcare programs. Sources said this deal would add work requirements to food aid for people aged 50 to 54.
(Reporting by Moira Warburton, Steve Holland, Diane Bartz, Daphne Psaledakis, Richard Cowan, Trevor Hunnicutt and Idrees Ali; Writing by David Morgan and Humeyra Pamuk; Editing by Heather Timmons, Mark Porter, Andrea Ricci, Deepa Babington and Lincoln Feast.)