*Washington (CNN) — The White House and House Republicans have a debt ceiling deal … in principle that will allow for the raising of the debt ceiling and cap spending, House Speaker Kevin McCarthy confirmed Saturday, moving the nation one step back from the brink of a historic default.
The agreement in principle was reached by President Joe Biden and McCarthy during a phone call Saturday, a source familiar with their call said. Now both leaders face the tall task of selling the deal to their allies in both chambers of Congress, where Republicans control the House and Democrats control the Senate. The deal must get passed before June 5 — the crucial date when Treasury Secretary Janet Yellen says the US will no longer be able to pay its bills.
“After weeks of negotiations, we have come to an agreement in principle. We still have a lot of work to do but I believe this is an agreement in principle that is worthy of the American people,” McCarthy said during a brief statement to reporters.
If the deal ends up passing through Congress and being signed into law by Biden before that so-called X date, the White House and House Republicans will have avoided an unprecedented economic crisis. A default by the US government, which has never happened, could spark a global recession and the loss of millions of jobs – a scenario that loomed over a last-minute rush of holiday weekend negotiations.
House GOP leaders were planning to brief all members on the state of negotiations later in the evening, according to multiple sources familiar with the situation, and the text of the deal will be reviewed overnight by both sides to ensure it lines up with the tentative agreement.
Despite the deal in principle, new issues could easily crop up at each step along the way, and each step has the potential to be time-consuming, running out the clock ahead of the debt limit deadline early next month. Stiff opposition is expected from both the left and right. That means it’s going to require an intense whipping operation – and support from both sides of the aisle – to get the bill over the finish line.
A source with knowledge of the negotiations told CNN earlier Saturday that a provision to impose new work requirements for certain social safety net programs had remained a final sticking point.
Republicans had been pushing the issue hard, saying beneficiaries of programs, such as food stamps, who do not have dependents should be forced to follow new rules. Democrats, however, had cast that idea as an attack on poor people.
McCarthy had arrived at the US Capitol on Saturday morning after his top Republican negotiators, Reps. Garret Graves of Louisiana and Patrick McHenry of North Carolina, had worked late into the night drafting the final details of a deal from the speaker’s office.
Asked by CNN if he was confident he could get the full House GOP Caucus behind him following an agreement, McCarthy said: “Do you ever think you’re going to get every single member to vote for it? I didn’t get every single member to vote for the first one. I didn’t get every single member to vote for me for speaker.”
But McCarthy maintained he’d be able to get the majority of House Republicans on board, telling CNN, “I don’t think I’ll have any problem with that.”
Plodding progress
Spending cuts on domestic programs were another issue that negotiators had worked to sort out late Friday night, but It’s unclear to what extent the the dispute has been fully resolved.
Energy permitting reform, which aims to cut down the time it takes for new projects to get approved, remained a high priority for Graves. The issue pits environmentalists against the oil and gas industry and has divided congressional Democrats.
The two sides have been trying to firm up the legislative text as they’ve gone along in a bid to speed up that process.
“House Republicans have a bill that we passed out of the House to raise the debt ceiling. So we have legislative text that is wide and complete. And so that is a helpful baseline when you’re getting into a window like this,” McHenry said Saturday.
Selling the deal to members will be no small task, with stiff opposition expected from both the left and right. That means it’s going to require an intense whipping operation – and support from both sides of the aisle – to get the bill over the finish line.
Default looms
The pressure on negotiators is intense as the US steadily inches closer to the possibility of a default and the threat of economic catastrophe.
In a major development Friday that will give lawmakers more time to reach and pass a deal, Treasury Secretary Janet Yellen said that Congress must address the debt ceiling by June 5 or the government will not have enough funds to pay all of the nation’s obligations in full and on time. Previously, Yellen had estimated that the earliest possible date a default could occur was June 1.
McHenry said that Yellen’s new date “clarifies that our timeline is very tight.”
“House Republicans asked for clarification. Chip Roy and Matt Gaetz and Byron Donalds and Dan Bishop, among others, asked for clarification on Secretary Yellen’s math. She updated her math. Obviously, it was a good request. And I think it clarifies our window for us to actually achieve the deal,” he said Saturday.
Debt limit predictions, however, aren’t clear-cut. Rather than a set-in-stone deadline, it is more of a best-guess estimate, which makes it harder to know exactly how much time Congress has to act to avert a potential financial catastrophe.
This story has been updated with additional information.
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