(MENAFN) In a race against time to limit federal spending and prevent a potential disastrous default, President Joe Biden and House Speaker Kevin McCarthy have reached an "agreement in principle" to raise the nation's legal debt ceiling. The deal, struck late on Saturday, will require support from both parties to gain congressional approval by the June 5 deadline.
The compromise was reached after President Biden and Speaker McCarthy had a phone conversation earlier on Saturday evening, as confirmed by McCarthy. In a statement late on Saturday night, President Biden acknowledged that the agreement represents a compromise, acknowledging that not everyone will get everything they desire, but emphasized that such compromises are part of the responsibility of governing.
At the heart of the agreement is a two-year budget deal that would maintain flat spending levels for 2024 and impose limitations for 2025. In exchange, the debt limit would be raised for two years, effectively pushing this volatile political issue beyond the next presidential election.
One notable aspect of the agreement is the modification of food stamp eligibility for able-bodied adults up to the age of 54. However, President Biden was able to secure waivers to ensure that veterans and the homeless are exempt from these changes.
Additionally, the two parties have made strides towards an ambitious overhaul of federal permitting processes to facilitate the development of energy projects and transmission lines. Instead of a comprehensive overhaul, the agreement will bring changes to the National Environmental Policy Act. These changes will designate a single lead agency responsible for developing economic reviews, with the aim of streamlining the permitting process.
The urgency for this agreement arose when Treasury Secretary Janet Yellen warned Congress that the United States could potentially default on its debt obligations by June 5, which was four days later than previously estimated. Faced with this looming threat, lawmakers were compelled to take timely action to raise the federal debt ceiling.
Overall, the agreement represents a significant step forward in averting a potential default crisis for the United States. However, it is now crucial for the agreement to secure bipartisan support in Congress to ensure its successful passage before the looming deadline.
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