Biden optimistic on bipartisan deal to suspend US debt ceiling

US President Joe Biden has expressed optimism that a bipartisan agreement to temporarily suspend the nation’s debt ceiling will pass through Congress. The deal must first be approved in the closely-divided House of Representatives before proceeding to a Senate vote. Both Democrat and Republican leaders anticipate it will be passed, although some lawmakers have stated they will vote against it. Without action, the US is at risk of defaulting on its debt by June 5.

On Monday, Biden said he felt “very good” about the likelihood of lawmakers passing the deal by the deadline. “We’ll see when the vote starts,” he told reporters as he left the White House on Monday afternoon, adding that he had “made some calls already” to lawmakers. Negotiators have been working to promote the package on the Memorial Day federal holiday on Monday, with both parties holding separate calls and meetings on the bill. The House and Senate are expected to return to the Capitol on Tuesday, with a House vote on the bill scheduled for Wednesday.

The proposed deal comes after lengthy and contentious negotiations between Democrats and Republicans. It includes suspending the debt ceiling until the first quarter of 2025, rather than raising it by a specific amount, as well as a cap on non-defence spending until 2024. The bill, titled the Fiscal Responsibility Act, was made public on Sunday.

Biden told reporters that same day that he does not believe his party made too many concessions in the agreement. “This is a deal that is good news,” he said. “It takes the threat of catastrophic default off the table, protects our hard-earned and historic economic recovery.”

Hakeem Jeffries, the Democratic House minority leader, told CBS that he believes his party will support it. “I do expect that there will be Democratic support once we have the ability to actually be fully briefed by the White House,” he said on Sunday. “But I’m not going to predict what those numbers may ultimately look like.”

However, Ro Khanna, a California Democrat and member of the House Progressive Caucus, told NBC News on Sunday night that a “large majority” of House Democrats are “in flux” on whether they would lend their support. Biden said on Monday he did not know if progressive Democratic lawmakers would back the deal. Meanwhile, Kevin McCarthy, the Republican House minority leader, said on Sunday that he expects over 95% of House Republicans will support the bill.

In an opinion piece published in the Wall Street Journal late on Sunday, McCarthy hailed the agreement as a hard-fought win for Republicans. “We are changing the direction in Washington through a responsible debt-limit increase that cuts spending, saves taxpayers money and restores economic growth,” he wrote.

During negotiations, Republicans had been seeking spending cuts in areas such as education and other social programmes in exchange for raising the US$31.4tn debt limit. As the 99-page proposed agreement was made public, some of the most conservative Republicans voiced concerns that the deal does not cut future spending enough. Republican Chip Roy of Texas said on Twitter that he and some others were going to try to stop it passing.

Some Democrats expressed concerns about changes in the agreement to the food stamps programme. The bill proposed raising the age from 50 to 54 for those who are required to work in order to receive food benefits, while eliminating work requirements for veterans and people who are homeless.

Republicans control the House by 222 to 213, while Democrats control the Senate by 51 to 49. The Treasury had warned that the US will run out of money if a deal is not passed. The US must borrow money to fund the government because it spends more than it raises in taxes. With the US dollar being the reserve currency of the world, a default would both upend the US economy and disrupt global markets.