US President Joe Biden says he has finalised a budget agreement with House Speaker Kevin McCarthy to raise the $US31.4 trillion ($48.1trillion) debt ceiling and that the deal is ready to move to Congress for a vote.
“I think it’s a really important step forward,” President Biden told reporters in brief remarks at the White House, after a call with House Speaker McCarthy to finalise the agreement.
“It takes the threat of catastrophic default off the table, protects our hard-earned and historic economic recovery.”
After weeks of negotiations, House Speaker McCarthy and President Biden forged a tentative agreement late on Saturday.
The deal will avert an economically destabilising default, if it passes through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations. The Treasury warned on Friday that would occur if the debt ceiling issue was not resolved by June 5.
“I strongly urge both chambers to pass that agreement,” President Biden said, adding that he expected House Speaker McCarthy to have the necessary votes for the deal to pass.
House Speaker McCarthy earlier on Sunday predicted that he would have the support of a majority of his fellow Republicans.
The deal has drawn fire from hardline Republicans and progressive Democrats, but President Biden and House Speaker McCarthy believe they have enough votes from moderates on both sides.
The agreement would suspend the debt limit through January of 2025, cap spending in the 2024 and 2025 budgets, claw back unused COVID funds, speed up the permitting process for some energy projects and include extra work requirements for food aid programs for poor Americans.
Members of the Republican hardline House Freedom Caucus said they would try to prevent the agreement from passing the House in a vote expected on Wednesday.
“We’re going to try,” Representative Chip Roy, a prominent Freedom Caucus member, said in a Sunday tweet.
But Mr McCarthy dismissed threats of opposition within his own party, saying “over 95 per cent” of House Republicans were “overwhelmingly excited” about the deal.
“This is a good strong bill that a majority of Republicans will vote for,” the California Republican told reporters in the US Capitol. “You’re going to have Republicans and Democrats be able to move this to the president.”
Republicans control the House by 222-213, while Democrats control the Senate by 51-49. These narrow margins mean that moderates from both sides will have to support the bill, if the compromise loses the support of the far left and far right wings of each party.
“I’m not happy with some of the things I’m hearing about,” Representative Pramila Jayapal, who chairs the Congressional Progressive Caucus, told CNN’s “State of the Union.”
House Democratic leader Hakeem Jeffries said he expected Democratic support for the deal, but declined in an interview on CBS’s “Face the Nation” to estimate how many of his party members would vote for it.
Progressive Democrats in both chambers had said they would not support any deal that had additional work requirements for government food and healthcare programs. Sources said this deal would add work requirements to food aid for people aged 50 to 54.
Democratic Representative Jim Himes told Fox News that the deal’s relatively “small” scope could attract support from members of Biden’s party.
