Joe Biden, Kevin McCarthy Reach ‘Agreement In Principle’ on Debt Ceiling

Joe Biden and Kevin McCarthy reached an “agreement in principle” late Saturday night to raise the nation’s debt ceiling to avoid a default.

However, the agreement will need approval in Congress before the June 5th deadline.

“I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people,” Kevin McCarthy wrote.

“Earlier this evening, Speaker McCarthy and I reached a budget agreement in principle,” Joe Biden said.

“It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone. And, the agreement protects my and Congressional Democrats’ key priorities and legislative accomplishments,” he added.

I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we've come to an agreement in principle that is worthy of the American people.

I'll deliver a statement at 9:10pm ET. Watch here:https://t.co/vmn31INPH5

— Kevin McCarthy (@SpeakerMcCarthy) May 28, 2023

Earlier this evening, Speaker McCarthy and I reached a budget agreement in principle.

It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone. And, the agreement protects my and…

— President Biden (@POTUS) May 28, 2023

In other words, the can in unchecked government spending got kicked down the road for the millionth time.

The “agreement in principle” would reportedly raise the debt by $4 trillion.

This “deal” is insanity.

A $4T debt ceiling increase with virtually no cuts is not what we agreed to.

Not gonna vote to bankrupt our country. The American people deserve better.

— Rep. Ralph Norman (@RepRalphNorman) May 28, 2023

The cut spending about $50 billion.

In exchange they are raising the debt ceiling about $4 trillion to get them thru 2 years.

This is pathetic. We are so ph*cked. 😢 pic.twitter.com/uvo1BJslkg

— Wall Street Silver (@WallStreetSilv) May 28, 2023

Reuters reported:

Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025, a source familiar with the deal said.

“It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach – there are no new taxes, no new government programs,” McCarthy said.

The deal will avert an economically destabilizing default, so long as it succeeds in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned on Friday will occur if the debt ceiling issue was not resolved by June 5.

Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, and were sharply critical of the deal as early details were reported.

Republican Representative Bob Good, a member of the conservative House Freedom Caucus, tweeted that he was hearing the deal would raise the debt by $4 trillion, and added “IF that is true, I don’t need to hear anything else. No one claiming to be a conservative could justify a YES vote.”

Fox News added:

An internal House GOP memo that outlines messaging points for the deal says McCarthy and the White House have agreed to cut non-defense discretionary spending to fiscal 2022 levels, a key asking point for Republicans. It also claws back billions of unspent COVID-19 pandemic funds and includes permitting reform to speed up approvals for energy and infrastructure projects.

Republican members were told on a conference call late on Saturday night that the deal also imposes a 1% growth cap on federal spending for six years, while spending for defense and veterans would go up, a source told Fox News. Lawmakers expect to be called back for a vote either Wednesday or Thursday, the source said.

However, another source familiar with the talks said both sides agreed to a two-year budget deal and to freeze non-defense discretionary spending at current fiscal 2023 levels rather than rolling it back.

A third source familiar with the details told Fox News Digital that the deal claws back $1.9 billion this year of the $80 billion in funding over ten years granted to the Internal Revenue Service in last year’s Inflation Reduction Act, and that the debt limit would be suspended until January 2025.

“Kevin says we can fight again NEXT year to rescind another year of the IRS $80 billion … but he simultaneously prevented that “fight” by agreeing to suspend the debt ceiling for TWO years. So there will be 85,260 more IRS agents rather than 87,000 to eat you alive. Big win,” Rep. Dan Bishop (R-NC) wrote.

Kevin says we can fight again NEXT year to rescind another year of the IRS $80 billion … but he simultaneously prevented that “fight” by agreeing to suspend the debt ceiling for TWO years.

So there will be 85,260 more IRS agents rather than 87,000 to eat you alive. Big win. https://t.co/CHRRIxFI4j

— Rep. Dan Bishop (@RepDanBishop) May 28, 2023