Negotiators have reached an initial agreement to extend the debt ceiling, aiming to prevent a catastrophic default just days before a potential money shortage predicted by the Treasury Department.
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The deal, led by President Biden and Speaker Kevin McCarthy, is expected to increase the country's borrowing capacity in exchange for spending cuts.
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The agreement needs to be translated into legislative language and gain approval from both the Republican-led House and the Democratic-controlled Senate.
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Speaker McCarthy announced the agreement, stating that it is deserving of the American people.The details of the agreement are yet to be finalized, with the text expected to be released on Sunday and a House vote planned for Wednesday.
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The agreement includes a two-year appropriations deal and a two-year extension of the debt limit, resolving the issue until after the 2024 election.
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Work requirements will be introduced for federal aid programs like SNAP for Americans up to the age of 54, with exceptions for homeless individuals and veterans.
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Averting this crisis would prevent an unprecedented default that could lead to job losses and severe damage to the American economy, potentially affecting President Biden's leadership and reelection campaign.
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President Biden and Speaker McCarthy had a lengthy phone call following days of tense discussions to resolve remaining sticking points.
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Some conservative Republicans had threatened to impede the bill if significant spending cuts were not included, and there may be procedural delays before a vote in the Senate if Senator Mike Lee is dissatisfied with the agreement's terms.