The Archive

Breaking News: Speaker Kevin McCarthy and House GOP leaders have struck a deal with President Joe Biden to raise the debt limit until early 2025 as both sides seek to avert a June 5 default.

The bipartisan agreement would cap government spending for two years, institute modest new work requirements for some social safety-net programs and speed permitting requirements for energy projects.

The agreement cuts spending year over year — a priority of McCarthy’s — and imposes new requirements and time limits for the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families program. It will, according to Republicans, require Biden to find new budgetary offsets for rules and regulations. And it will cut FY2023 funding for the Internal Revenue Service.

Democrats say that FY2024 non-defense funding levels are roughly flat from FY2023. And FY2025 includes an increase of 1% compared to current levels when accounting for “appropriations adjustments,” according to Democrats. Here are the White House talking points on the agreement. And here are the House GOP talking points.

On the permitting reform front, the legislation tentatively streamlines elements of the National Environmental Policy Act. But McCarthy, on a conference call with House Republicans, said the permitting reform element was not complete yet.

There are no budget caps after 2025, according to our sources. The work requirements do not impact Medicaid, but the agreement imposes some time limits for SNAP benefits, which would sunset in 2030.

In a statement, Biden said the agreement “protects my and Congressional Democrats’ key priorities and legislative accomplishments.”

“​​The agreement represents a compromise, which means not everyone gets what they want,” Biden added. “That’s the responsibility of governing.”

Clinching this deal is a victory for McCarthy. The California Republican, in his first term as speaker, said he wouldn’t agree to lift the U.S. government’s borrowing limit without concessions from Biden, especially on spending levels for FY 2024.

Biden and Senate Majority Leader Chuck Schumer refused to negotiate, saying House Republicans must approve a clean debt limit and then the two sides could negotiate a budget deal later. But they ended up bending to McCarthy’s wishes. This episode, however it ends up, will define McCarthy’s first term as speaker.

For Biden, who is facing reelection next year, this is also a victory and another big tack toward the political center.

After approving trillions of dollars in new spending during the last Congress thanks to Democratic control of Washington, Biden has been forced to deal with a House GOP majority that wants to roll back much of those accomplishments. Biden will argue that he has protected the U.S. economy from a catastrophic default while also preserving virtually all of his legislative achievements.

But McCarthy rejected Biden’s calls for new taxes to help close the projected $1.5 trillion deficit. And the White House concessions on spending and work requirements will be heavily criticized by progressives.

And this agreement is a big moment for two McCarthy allies – Reps. Garret Graves (R-La.) and Patrick McHenry (R-N.C.). The two were able to work closely with OMB Director Shalanda Young and Steve Ricchetti, counselor to the president, to cut the deal. And both sides kept it cordial, even during tense negotiations – a rarity these days.

Now comes the most crucial phase of the process. The bill is likely to be on the floor Wednesday ahead of the June 5 “X-date.” The House is out for Memorial Day, and the GOP leadership will need to whip its members to vote for the bill from afar – every member will hear from someone in leadership in the next 24 hours. This will be a challenge for McCarthy, House Majority Leader Steve Scalise and House Majority Whip Tom Emmer.

Some conservative House Republicans have already started criticizing the agreement, saying it doesn’t do enough to curtail spending. A House GOP bill — the Limit, Save, Grow Act — would mandate nearly $5 trillion in spending cuts while lifting the debt limit for only one year. Biden and Schumer, however, flatly rejected that measure, forcing McCarthy to negotiate down.

Rep. Bob Good (R-Va.) said on a GOP call Saturday night that he was “extremely disappointed “ with the compromise.

McCarthy brushed off the criticism and defended the contours of the deal. “I can’t agree with you on any shape that we did not get a win,” McCarthy said to Good.

Rep. Jim Jordan (R-Ohio), a McCarthy ally, defended the compromise on the House GOP call.

“​​If I understand, for the first time in American history we’re gonna spend less money than we did the year before. We’re gonna get work requirements … That seems like a pretty darn good deal to me,” Jordan said.

Biden and White House aides now need to coax as many as 100 House Democrats to vote for the measure. The White House will hold a virtual briefing for House Democrats Sunday at 5 p.m. Top House Democrats are pushing for the key White House negotiators, Young and Ricchetti, to deliver the briefing.

Many House Democrats have been unenthusiastic about the details of the package trickling out. House Minority Leader Hakeem Jeffries wasn’t part of the negotiations, although White House officials have consulted with him.

The Senate will have to clear the bill quickly if and when the House passes it. There will be two cloture votes – on a motion to proceed to the legislation and then a second to cut off debate and move toward final passage. But as with anything in the Senate, just one senator can slow the process down dramatically. Sen. Mike Lee (R-Utah) has already threatened to do this.

— Jake Sherman, Mica Soellner, Andrew Desiderio and Heather Caygle

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