Amid growing concerns of a potential default by early June, the United States president Joe Biden and Republican Kevin McCarthy have reportedly reached an “agreement in principle” to raise the federal government’s $31.4 trillion debt ceiling.
According to a May 28 report from Reuters citing two sources familiar with the negiotations, the “tentative” deal was reached after a 90-minute phone call between Biden and McCarthy on May 27.
It was reported that while “the exact details of the deal were not immediately available,” an agreement has been made to limit the U.S. government’s spending for the next two years, excluding expenses related to national security.
“Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for two years, in exchange for a debt ceiling increase over a similar period” according to the sources.
“The White House and negotiators for House Republicans have reached an agreement in principle to avert a debt default,” the sources stated.
However, one source reported that there are still a few components of the deal to be finalized, stating:
“But, I’m not sure it’s completely settled. Might be one or two small things they need to finish. But close enough to move forward.”
It was reported that the deal would prevent an “economically destabalizing default.” It was emphasized that the deal must be passed through Congress before the Treasury “runs short of money” – which it was recently warned would occur on June 5 if the debt ceiling is not raised.
This is a developing story, and further information will be added as it becomes available.