Debt-Ceiling Deal Reached Days Before Default Deadline

Speaker Kevin McCarthy (R., Ky.) and President Joe Biden reached an agreement, in principle, to raise the debt ceiling for two years on Saturday night, potentially averting a national economic crisis.

Early reports of the deal suggest that non-defense-related discretionary spending would be capped at a 1 percent increase until 2025, pushing the next contentious round of negotiations until after the 2024 presidential election. Moreover, nearly $2 billion President Biden had allocated to the IRS via the Inflation Reduction Act would be rescinded alongside a $29 billion clawback of unused government pandemic funds.

“We still have a lot of work to do. But I believe this is an agreement in principle that’s worthy of the American people. It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, and rein in government overreach. There are no new taxes, no new government programs. There’s a lot more within the bill,” Speaker McCarthy said following news of the announcement.