House Republicans make a tentative agreement to raise the debt ceiling

The White House and House Republicans have an agreement in principle on a deal to raise the debt ceiling for two years and cap spending, House Speaker Kevin McCarthy confirmed Saturday, moving the nation one step back from the brink of a historic default.

The agreement in principle was reached by President Joe Biden and McCarthy during a phone call Saturday, a source familiar with their call said. Now both leaders face the tall task of selling the deal to their allies in both chambers of Congress, where Republicans control the House and Democrats control the Senate. The deal must get passed before June 5 – the crucial date when Treasury Secretary Janet Yellen says the US will no longer be able to pay its bills.

“After weeks of negotiations, we have come to an agreement in principle. We still have a lot of work to do but I believe this is an agreement in principle that is worthy of the American people,” McCarthy said during a brief remarks to reporters.

“The agreement protects my and congressional Democrats’ key priorities and legislative accomplishments,” Biden said in a statement. “The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing.”

If the deal ends up passing through Congress and being signed into law by Biden before that so-called X date, the White House and House Republicans will have avoided an unprecedented economic crisis. A default by the US government, which has never happened, could spark a global recession and the loss of millions of jobs – a scenario that loomed over a last-minute rush of holiday weekend negotiations.

The two-year deal would also push the next fight over raising the debt ceiling until after the 2024 elections.