With the X-date for potential US default now estimated at June 5, House GOP and White House negotiators appear to be settling on an agreement to raise the debt limit and cap federal spending for two years, Bloomberg reports, citing people familiar with the discussions.
That said, while the two sides have whittled down their differences over the past several days, the details are tentative, and a final agreement is not yet in sight. The two sides have yet to agree on the amount of the cap, however under the emerging agreement, defense spending would be allowed to rise 3% next year, which is in line with President Biden's budget request.
"We’re making progress and our goal is to make sure that we get a deal because default is unacceptable," said Deputy Treasury Secretary Wally Adeyemo, who warned CNN that payments to Social Security beneficiaries, veterans and others would be delayed in the event of a default. "The president has committed to making sure that we have good-faith negotiations with the Republicans to reach a deal because the alternative is catastrophic for all Americans."
The emerging deal would also include a measure to upgrade the nation's electric grid to be able to handle the massive requirements of renewable energy, a key goal for Democrats, while speeding up permits for pipelines and other fossil fuel projects demanded by Republicans.
The deal would also cut $10 billion from an $80 billion increase for the IRS that the Biden administration included in the Inflation Reduction Act, after Republicans warned of a 'wave' of audits led by new agents. Democrats say the increase will pay for itself via less tax cheating.
As Rabobank notes, the deal would cap just about everything aside from defense. --->READ MORE HERE
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House Speaker Kevin McCarthy brushed off grumblings from the conservative flank of his conference over his ongoing debt limit negotiations with the White House, conceding that a final agreement would have to pass the Democratically-held Senate and be signed by President Biden.
The Republican leader arrived at the U.S. Capitol late Friday morning, briefly stopping to tell reporters he felt "progress" was made in the prior night’s talks.
"We’ve got to make more progress now," McCarthy said.
It comes after a letter signed by 35 members of the hardline-right House Freedom Caucus called on him to "hold the line" against the White House and not compromise on any points laid out in the House GOP’s debt limit bill. Passed in April, the Limit, Save, Grow Act would raise the debt limit by $1.5 trillion or through March 2024 and couple that with a $150 billion spending cut from this year to the next, tighter work requirements for federal benefits and a rollback of key Biden administration policies.
In addition to staying firm on those demands, the Freedom Caucus urged McCarthy to consider adding border security provisions into the final deal — something that’s virtually guaranteed to be a nonstarter with Democratic negotiators.
"You're talking to people who don't know what's in the deal. So I'm not concerned about anybody making any comments right now about what they think is in or not in," McCarthy said when asked about dissent within his conference. "Whenever we come to an agreement, we'll make sure we will first brief our entire conference. So when you go and ask them questions, at least let them know what's in it before they're trying to get it." --->READ MORE HERE
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