US President Joe Biden confirmed on Sunday that he finalized a budget agreement with House Speaker Kevin McCarthy to suspend the government's debt ceiling of $31.4 trillion until January 1, 2025, stating that "the agreement is ready for Congress for a vote."
Biden told reporters at the White House, following a phone call with McCarthy to finalize a preliminary agreement reached on Saturday night: "This agreement is good news for the American people. It eliminates the risk of catastrophic default and protects our hard-earned historic economic recovery."
The agreement, which prevented the US government from defaulting on its debts—an event that would have set a precedent in the country's history—came after weeks of heated negotiations between Biden and House Republicans. Congress, divided between Democrats and Republicans, must still approve the agreement before June 5, the date by which the US Treasury claims it will be unable to manage funds to meet all its obligations.
Senate Republican Leader Mitch McConnell praised the agreement in a statement, urging the Senate to move quickly to approve it "without unnecessary delays." However, members of the hardline House Freedom Caucus indicated they would try to block approval of the agreement in a vote expected on Wednesday.
Representative Chip Roy, a prominent member of the caucus, tweeted on Sunday: "We will try." McCarthy dismissed the threats from dissenters within his party, stating that "more than 95 percent" of House Republicans are "extremely enthusiastic" about the agreement.
House Democratic Leader Hakeem Jeffries expressed his expectation for Democratic support for the agreement but declined in an interview with CBS's Face the Nation to estimate the number of his party members likely to vote in favor of it.
The agreement suspends the debt ceiling until January 1, 2025, sets a cap on spending for the 2024 and 2025 budgets, and includes the reclamation of unused funds earmarked for combating the COVID-19 pandemic, and accelerates permitting for certain energy projects along with some additional work requirements for food aid programs for low-income Americans.
According to the text of the agreement, the bill will allow for over $886 billion in security spending for the fiscal year 2024 and over $703 billion in non-security spending for the same year, excluding certain amendments. It also permits a one percent increase in security spending for fiscal year 2025.
