Biden, McCarthy Say They're Close to Debt Deal

'We knew this would not be easy,' McCarthy says
By Newser Editors and Wire Services
Posted May 26, 2023 5:45 AM CDT
Biden, McCarthy Say They're Close to Debt Deal
President Biden speaks in the Rose Garden of the White House in Washington, Thursday, May 25, 20233.   (AP Photo/Susan Walsh)

Days from a deadline, President Biden and House Speaker Kevin McCarthy are narrowing in on a two-year budget deal aiming to curb federal deficits in exchange for lifting the nation's debt ceiling and staving off an economically devastating government default. The Democratic president and Republican speaker hope to strike a budget compromise this weekend. With Republicans driving for steep cuts, the two sides have been unable to agree to spending levels for 2024 and 2025. Any deal would need to be a political compromise, with support from both Democrats and Republicans to pass the divided Congress.

But the budget flow isn't the only hang-up. A person familiar with the talks tells the AP that the two sides are “dug in” on whether to agree to Republican demands to impose stiffer work requirements on people who receive government food stamps, cash assistance, and health care aid, some of the most vulnerable Americans. Yet both Biden and McCarthy expressed optimism heading into the weekend that the gulf between their positions could be bridged. A two-year deal would raise the debt limit past the 2024 presidential election.

"We knew this would not be easy," McCarthy said as he left the Capitol for the evening Thursday. "It’s hard, but we’re working and we’re going to continue to work until we get this done." In remarks at the White House, Biden said, "It’s about competing versions of America. The only way to move forward is with a bipartisan agreement. And I believe we’ll come to an agreement that allows us to move forward and protects the hardworking Americans of this country."

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The House has adjourned for the long weekend and lawmakers are tentatively not expected back at work until Tuesday, just two days before the early June deadline when Treasury Secretary Janet Yellen has said the US could start running out of cash to pay its bills and face a federal default. Biden is also away for the weekend. Fitch Ratings agency has placed the United States’ AAA credit on "ratings watch negative," warning of a possible downgrade, though world markets rose Friday, lifted by optimism that a deal will be reached, the AP reports.

(More debt limit stories.)

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