Washington — With a deadline looming in the debt ceiling crisis, White House negotiators and House Republican leaders have reached a deal that would avert a default.
The deal would raise the debt ceiling for about two years and cap federal spending at the same point as fiscal year 2023 for two years, CBS News learned late Thursday.
Under the proposal, spending on defense systems and veterans would accumulate in 2024, while non-defense discretionary spending would decrease, adding spaces such as physical care and education.
The proposal would also include transferring $10 billion from the IRS’s $80 billion investment plan that Congress approved last year as a component of the Inflation Reduction Act to non-defense discretionary investments.
All discretionary spending, whether for defense or non-defense, would increase by as much as 1% in fiscal 2025, according to the proposal.
The White House had proposed a deal to cancel up to $30 billion in unspent COVID-19 relief funds, CBS News learned earlier Thursday.
Both sides hope to succeed in a settlement on government default, an unprecedented event that would have highly successful effects on the global economy. position until after the 2024 elections.
House Speaker Kevin McCarthy has insisted he needs to restrict spending to 2022 levels, and conservative Republicans have been pressuring McCarthy to “stay the course” on spending cuts. Levels. The White House argues that a two-year spending cap would reduce spending by more than $1 trillion, a view shared by House Republicans.
Negotiations between the White House and McCarthy’s representatives continued Thursday, with some hints of a deal in sight. On Thursday morning, McCarthy said negotiators had been working “well past midnight” the night before and said he had asked his negotiating team to paint “24/7” to succeed in a deal.
Republican Rep. Garret Graves of Louisiana, one of the House negotiators, told reporters Thursday night that the negotiation procedure is “slow. “
“They refuse to negotiate over paint requirements,” Graves said.
Licensing reform and work requirements remain a topic in progress for negotiators, according to a source familiar with the talks. The two sides also ran to expand a mechanism to incentivize Congress to approve the 12 annual appropriations to fund the government. If a deal is reached, any ongoing short-term solutions would be subject to other spending limits, the source said.
Treasury Secretary Janet Yellen warned that it’s possible the U. S. could not do so. The U. S. government will simply default and be unable to pay its expenses by early June, and that any negotiated agreement will take some time to pass either house of Congress. Lawmakers are leaving Washington, D. C. , for the Memorial Day holiday, even though congressional leaders have warned them they can return at short notice.
President Biden reiterated Thursday afternoon that he and McCarthy were at least on the same page about noncompliance.
“Chairman McCarthy and I have had several productive conversations, and our groups continue to meet as we speak, in fact, and they are making progress,” the president said Thursday afternoon. Debt is not an option. Other Americans deserve to know that their Social Security bills will be there, that veterans’ hospitals will stay open, and that economic progress will be made, and we will continue to do so. Non-compliance puts all of this at risk. The leaders of Congress perceive it and they all agreed: there will be no default. “
— Nancy Cordes, Kathryn Watson and Rebecca Kaplan contributed to this report.