Republicans, Biden Close to Debt Ceiling Agreement, Congress Asked to Remain Ready for Voting

The Republicans and the White House administration could be nearing a deal to cut spending and raise the US debt ceiling. The clock, however, is ticking because the deadline is June 1 and if the default is not avoided then it could wreak havoc on the American economy as well as on global markets.

US President Joe Biden and House Speaker Kevin McCarthy are considering a deal which would raise the government’s $31.4tn debt ceiling for two years. However, spending will be capped on most items, news agency Reuters said in a statement.

It would allocate more funds to military and veterans’ discretionary spending, while keeping non-defense discretionary spending at the same level as the current year.

The agreement would outline the overall spending limit for discretionary programs, covering areas such as housing and education. During their virtual meeting on Thursday, the two parties were reportedly only $70 billion apart in reaching a total amount exceeding $1 trillion, the Guardian said in a separate report.

The US Congress has also told lawmakers that they need to be back on Monday in case a deal is reached over the course of the weekend and they have to vote on the new deal.

Republicans also relaxed their demands on increasing military spending while decreasing non-defense spending and sided with White House that all budget items must be treated equally.

“Speaker McCarthy and I have had several productive conversations, and our staff continue to meet – as we speak, as a matter of fact – and they’re making progress. There will be no default, and it’s time for Congress to act now,” Biden was quoted as saying by the Guardian.

Biden, however, said he was fighting for the middle-class and working-class Americans and said the burden of the government which is trying to get the “fiscal house in order” should not fall on their shoulders.

“I don’t believe the whole burden should fall on the backs of middle-class and working-class Americans. My House Republican friends disagree,” Biden was quoted as saying by the Guardian.

“I thought we made some progress. There’s still some outstanding issues, and I’ve directed our teams to work 24/7,” McCarthy was quoted as saying by the Guardian.

There is just one week left for the potential default deadline of June 1.