By Steve Holland, Gram Slattery and Katharine Jackson

WASHINGTON (Reuters) -U.S. President Joe Biden and top congressional Republican Kevin McCarthy reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling on Saturday evening, ending a months-long stalemate.

However, the deal was announced without any celebration, in terms that reflected the bitter tenor of the negotiations and the difficult path it has to pass through Congress before the United States runs out of money to pay its debts in early June.

“I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people,” McCarthy tweeted.

Biden called the deal “an important step forward” in a statement, saying: “The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing.”

The deal would raise the debt limit for two years while capping spending over that time, claw back unused COVID funds, speed up the permitting process for some energy projects and includes some extra work requirements for food aid programs for poor Americans.

Biden and McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal, with McCarthy planning to brief his members later in the evening.

“We still have more work to do tonight to finish the writing of it,” McCarthy told reporters on Capitol Hill. McCarthy said he expects to finish writing the bill Sunday, then speak to Biden and have a vote on the deal on Wednesday.

“It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach – there are no new taxes, no new government programs,” he said.

Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025, a source familiar with the deal said.

The deal will avert an economically destabilizing default, so long as they succeed in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned Friday will occur if the debt ceiling is not raised by June 5.

Biden and McCarthy have to carefully thread the needle in finding a compromise that can clear the House, with a 222-213 Republican majority, and Senate, with a 51-49 Democratic majority.

Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, and were sharply critical of the deal as some details were reported in recent days.

Republican Representative Bob Good, a member of the conservative House Freedom Caucus, tweeted that he was “hearing” the deal would raise the debt by $4 trillion, and added “IF that is true, I don’t need to hear anything else. No one claiming to be a conservative could justify a YES vote.”

North Carolina’s Dan Bishop described the deal earlier Saturday as “utter capitulation in progress. By the side holding the cards.”

One high-ranking member of the House Freedom Caucus said they were in the process of gauging member sentiment, and unsure what the vote numbers might be.

TAXES VS. SPENDING CUTS

Republicans say they want to cut spending to slow the growth of the U.S. debt, which is now roughly equal to the annual output of the country’s economy. Biden and Democrats have pushed to increase taxes on the wealthy and companies to shrink the debt.

The long standoff on raising the debt ceiling spooked financial markets, weighing on stocks and forcing the United States to pay record-high interest rates in some bond sales. A default would take a far heavier toll, economists say, likely pushing the nation into recession, shaking the world economy and leading to a spike in unemployment.

Biden for months refused to negotiate with McCarthy over future spending cuts, demanding that lawmakers first pass a “clean” debt-ceiling increase free of other conditions, and present a 2024 budget proposal to counter his issued in March. Two-way negotiations between Biden and McCarthy began in earnest on May 16.

The work to raise the debt ceiling is far from done. McCarthy has vowed to give House members 72 hours to read the legislation before bringing it to the floor for a vote. That will test whether enough moderate members support the compromises in the bill to overcome opposition from both hard-right Republicans and progressive Democrats.

Then it will need to pass the Senate, where it will need at least nine Republican votes to succeed. There are multiple opportunities in each chamber along the way to slow down the process.

(Reporting by Moira Warburton, Steve Holland and Katharine Jackson; Writing by Andy Sullivan; Editing by Scott Malone, Frances Kerry, Daniel Wallis, Heather Timmons, Dave Gregotio, Chizu Nomiyama)

WASHINGTON (Reuters) – U.S. President Joe Biden and top congressional Republican Kevin McCarthy have reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling, ending a months-long stalemate.

Here are some quotes from the announcement and reactions to the news:

DEMOCRATIC PRESIDENT JOE BIDEN

“Earlier this evening, Speaker McCarthy and I reached a budget agreement in principle.

“It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone. And, the agreement protects my and Congressional Democrats’ key priorities and legislative accomplishments.

“The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing.

“And, this agreement is good news for the American people, because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost.

“Over the next day, our negotiating teams will finalize legislative text and the agreement will go to the United States House and Senate. I strongly urge both chambers to pass the agreement right away.”

REPUBLICAN HOUSE SPEAKER KEVIN MCCARTHY

“I just got off the phone with the President – I talked to him twice today – and 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’s worthy of the American people.

“It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach – there are no new taxes, no new government programs.

“There’s a lot more within the bill. We still have more work to do tonight to finish all the writing of it” …

“I expect to finish the writing of the bill, checking with the White House and speaking to the president again tomorrow afternoon, and then posting the text of it tomorrow, and then we vote on it on Wednesday.”

DEMOCRATIC REPRESENTATIVE TED LIU

“Tonight, I have been informed that there is an agreement in principle between the White House and House Republicans. This was a House Republican manufactured crisis. It’s up to House Republicans to defuse that crisis. And as soon as we learn the details of disagreement in principle we will have administration officials provide that information to the Democratic members of our caucus.”

REPUBLICAN REPRESENTATIVE BOB GOOD

​ “I am hearing the ‘deal’ is for a $4 trillion increase in the debt limit. If that is true, I don’t need to hear anything else. No one claiming to be a conservative could justify a YES vote.”

REPUBLICAN REPRESENTATIVE MARJORIE TAYLOR GREENE ON TWITTER

“Hearing @SpeakerMcCarthy’s soon to be finalized agreement on the debt limit will clawback $400 MILLION from the CDC “Global Health Fund” that sends money overseas to countries like China.

“Here’s a few other countries that will no longer get access to these taxpayer dollars: Afghanistan, Albania, Armenia, Bangladesh, Bhutan, Burkina Faso, Burma, Cambodia, China, Ivory Coast, DRC, Eswatini, Ethiopia, Georgia, Ghana, Haiti, India, Indonesia, Kenya, Kyrgyzstan, Liberia, Malawi, Mail, Moldova, Mongolia, Morocco, Namibia, Nigeria, Oman, Pakistan, Philippines, Rwanda, Senegal, Sierra Leone, South Africa, South Sudan, Tanzania, Thailand, Tunisia, Uganda, Ukraine, Uzbekistan, Vietnam, Zambia, and Zimbabwe.

“Also on the chopping block is nearly $1.5 BILLION from the CDC’s “Vaccine Distribution and Monitoring Program.””

DEMOCRATIC REPRESENTATIVE JUDY CHU

“I will be looking to see whether there are these increased work requirements for the poor. I thought that was the worst aspect of their (Republican) proposals because that would only serve to inflict pain on the poor.”

“If we didn’t reach a deal … the average American person would clearly see a hit … we had to reach some kind of conclusion here.”

(Reporting by David Brunnstrom, Ismail Shakil and Gram Slattery; Editing by Heather Timmons and David Gregorio)

By Steve Holland, Gram Slattery and Katharine Jackson

WASHINGTON (Reuters) -U.S. President Joe Biden and top congressional Republican Kevin McCarthy reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling on Saturday evening, ending a months-long stalemate.

However, the deal was announced without any celebration, in terms that reflected the bitter tenor of the negotiations and the difficult path it has to pass through Congress before the United States runs out of money to pay its debts in early June.

“I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people,” McCarthy tweeted.

Biden called the deal “an important step forward” in a statement, saying: “The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing.”  

The deal would raise the debt limit for two years while capping spending over that time, claw back unused COVID funds, speed up the permitting process for some energy projects and includes some extra work requirements for food aid programs for poor Americans.

Biden and McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal, with McCarthy planning to brief his members later in the evening.

“We still have more work to do tonight to finish the writing of it,” McCarthy told reporters on Capitol Hill. McCarthy said he expects to finish writing the bill Sunday, then speak to Biden and have a vote on the deal on Wednesday.

“It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach – there are no new taxes, no new government programs,” he said.

Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025, a source familiar with the deal said.

The deal will avert an economically destabilizing default, so long as they succeed in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned Friday will occur if the debt ceiling is not raised by June 5.

Biden and McCarthy have to carefully thread the needle in finding a compromise that can clear the House, with a 222-213 Republican majority, and Senate, with a 51-49 Democratic majority.

Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, and were sharply critical of the deal as some details were reported in recent days.

Republican Representative Bob Good, a member of the conservative House Freedom Caucus, tweeted that he was “hearing” the deal would raise the debt by $4 trillion, and added “IF that is true, I don’t need to hear anything else. No one claiming to be a conservative could justify a YES vote.”

North Carolina’s Dan Bishop described the deal earlier Saturday as “utter capitulation in progress. By the side holding the cards.”

One high-ranking member of the House Freedom Caucus said they were in the process of gauging member sentiment, and unsure what the vote numbers might be.

TAXES VS. SPENDING CUTS

Republicans say they want to cut spending to slow the growth of the U.S. debt, which is now roughly equal to the annual output of the country’s economy. Biden and Democrats have pushed to increase taxes on the wealthy and companies to shrink the debt.

The long standoff on raising the debt ceiling spooked financial markets, weighing on stocks and forcing the United States to pay record-high interest rates in some bond sales. A default would take a far heavier toll, economists say, likely pushing the nation into recession, shaking the world economy and leading to a spike in unemployment.

Biden for months refused to negotiate with McCarthy over future spending cuts, demanding that lawmakers first pass a “clean” debt-ceiling increase free of other conditions, and present a 2024 budget proposal to counter his issued in March. Two-way negotiations between Biden and McCarthy began in earnest on May 16.

The work to raise the debt ceiling is far from done. McCarthy has vowed to give House members 72 hours to read the legislation before bringing it to the floor for a vote. That will test whether enough moderate members support the compromises in the bill to overcome opposition from both hard-right Republicans and progressive Democrats.

Then it will need to pass the Senate, where it will need at least nine Republican votes to succeed. There are multiple opportunities in each chamber along the way to slow down the process.

(Reporting by Moira Warburton, Steve Holland and Katharine Jackson; Writing by Andy Sullivan; Editing by Scott Malone, Frances Kerry, Daniel Wallis, Heather Timmons, Dave Gregotio, Chizu Nomiyama)

WASHINGTON (Reuters) – U.S. President Joe Biden and top congressional Republican Kevin McCarthy have reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling, ending a months-long stalemate.

Here are some quotes from the announcement and reactions to the news:

DEMOCRATIC PRESIDENT JOE BIDEN

“Earlier this evening, Speaker McCarthy and I reached a budget agreement in principle.

“It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone. And, the agreement protects my and Congressional Democrats’ key priorities and legislative accomplishments.

“The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing.

“And, this agreement is good news for the American people, because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost.

“Over the next day, our negotiating teams will finalize legislative text and the agreement will go to the United States House and Senate. I strongly urge both chambers to pass the agreement right away.”

REPUBLICAN HOUSE SPEAKER KEVIN MCCARTHY

“I just got off the phone with the President – I talked to him twice today – and 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’s worthy of the American people.

“It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach – there are no new taxes, no new government programs.

“There’s a lot more within the bill. We still have more work to do tonight to finish all the writing of it” …

“I expect to finish the writing of the bill, checking with the White House and speaking to the president again tomorrow afternoon, and then posting the text of it tomorrow, and then we vote on it on Wednesday.”

DEMOCRATIC REPRESENTATIVE TED LIU

“Tonight, I have been informed that there is an agreement in principle between the White House and House Republicans. This was a House Republican manufactured crisis. It’s up to House Republicans to defuse that crisis. And as soon as we learn the details of disagreement in principle we will have administration officials provide that information to the Democratic members of our caucus.”

REPUBLICAN REPRESENTATIVE BOB GOOD

​ “I am hearing the ‘deal’ is for a $4 trillion increase in the debt limit. If that is true, I don’t need to hear anything else. No one claiming to be a conservative could justify a YES vote.”

DEMOCRATIC REPRESENTATIVE JUDY CHU

“I will be looking to see whether there are these increased work requirements for the poor. I thought that was the worst aspect of their (Republican) proposals because that would only serve to inflict pain on the poor.”

“If we didn’t reach a deal … the average American person would clearly see a hit…we had to reach some kind of conclusion here.”

(Reporting by David Brunnstrom, Ismail Shakil and Gram Slattery; Editing by Heather Timmons and David Gregorio)

By Brad Brooks and Maria Caspani

LUBBOCK, Texas (Reuters) -The Texas House on Saturday voted to impeach Attorney General Ken Paxton, a conservative firebrand and ally of former President Donald Trump who has been accused by his fellow Republicans of abuse of office.

In historic proceedings, the 149-member House voted 121-23 to impeach Paxton after hours of debate during which the chamber heard speeches from supporters and opponents of impeachment. Two members were present but not voting while three were absent.

Paxton will now be temporarily removed from office pending a trial in the Senate, where his wife, Angela Paxton, is a senator. The Texas Senate is in recess until 1 p.m. CDT (1800 GMT) on Sunday, according to its website.

Paxton has denied the accusations and denounced the proceedings as “illegal, unethical, and profoundly unjust” in a statement on Twitter after Saturday’s vote.

“I look forward to a quick resolution in the Texas Senate, where I have full confidence the process will be fair and just,” he said.

In a message on his social media channel Truth Social ahead of the vote, Trump, who is seeking re-election in 2024, vowed to “fight” Texas House Republicans if Paxton were to be impeached.

The 20 articles of impeachment presented by a Republican-led House committee accuse Paxton of improperly aiding a wealthy political donor, conducting a sham investigation against whistleblowers in his office whom he fired, and covering up his wrongdoing in a separate federal securities fraud case against him, among other offenses.

Paxton’s impeachment proceedings laid bare the rift among Texas Republicans. Some spoke passionately in support of impeaching the state’s top law enforcement official.

“Attorney General Paxton continuously and blatantly violated laws, rules, policies and procedures,” Representative David Spiller said ahead of the vote.

Others vehemently opposed it. John Smithee, a long-serving conservative member of the chamber, said he was not speaking in Paxton’s defense but criticized the process and said there was insufficient evidence.

“There is not word, not one sentence in the testimony before you that would be admissible in any Texas court of law,” Smithee said. “It is hearsay within hearsay within hearsay.”

Paxton has staked out a position on the far right on divisive cultural issues. He has sued the Biden administration nearly 50 times attempting to halt what has he labeled as “unlawful tyrannical policies” on issues including immigration, gun rights and business regulation.

The five-member Texas House General Investigating Committee voted unanimously on Thursday to recommend that Paxton be impeached and removed from office.

Paxton easily won re-election last year after fending off a Republican primary challenge from George P. Bush, a scion of two former presidents.

The committee has heard testimony from its investigators about several years of alleged abuse of office by Paxton, including that he provided friend and donor Nate Paul, a Texas real estate developer, with FBI files related to the bureau’s investigation into Paul.

The impeachment articles also allege Paxton engaged in bribery when Paul hired a woman with whom Paxton was having an extramarital affair.

(Reporting by Brad Brooks in Lubbock, Texas, Daniel Trotta in Carlsbad, California, and Maria Caspani in New York; Editing by Tom Hogue, David Gregorio and Daniel Wallis)

By Steve Holland, Gram Slattery and Katharine Jackson

WASHINGTON (Reuters) -U.S. President Joe Biden and top congressional Republican Kevin McCarthy have reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling, ending a months-long stalemate.

However, the deal was described in terms that indicated it may not be absolute, and without any celebration — an indication of the bitter tenor of the negotiations, and the difficult path it has to pass through Congress before the United States runs out of money to pay its debts in early June.

“I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people,” McCarthy tweeted.

The deal would raise the debt limit for two years while capping spending over that time, and includes some extra work requirements for programs for the poor.

Biden and McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal.

“We still have more work to do tonight to finish the writing of it,” McCarthy told reporters on Capitol Hill. McCarthy said he expects to finish writing the bill Sunday, then speak to Biden and have a vote on the deal on Wednesday.

The deal will avert an economically destabilizing default, so long as they succeed in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned Friday will occur if the debt ceiling is not raised by June 5.

Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, including new work requirements on some benefit programs for low-income Americans and for funds to be stripped from the Internal Revenue Service, the U.S. tax agency.

They said they want to slow the growth of the U.S. debt, which is now roughly equal to the annual output of the country’s economy.

Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025, sources said.

The two sides have to carefully thread the needle in finding a compromise that can clear the House, with a 222-213 Republican majority, and Senate, with a 51-49 Democratic majority.

One high-ranking member of the hardline House Freedom Caucus said they were in the process of gauging member sentiment, and unsure what the vote numbers might be.

The long standoff spooked financial markets, weighing on stocks and forcing the United States to pay record-high interest rates in some bond sales. A default would take a far heavier toll, economists say, likely pushing the nation into recession, shaking the world economy and leading to a spike in unemployment.

Biden for months refused to negotiate with McCarthy over future spending cuts, demanding that lawmakers first pass a “clean” debt-ceiling increase free of other conditions, and present a 2024 budget proposal to counter his issued in March. Two-way negotiations between Biden and McCarthy began in earnest on May 16.

Democrats accused Republicans of playing a dangerous game of brinkmanship with the economy. Republicans say recent increased government spending is fueling the growth of the U.S. debt, which is now roughly equal to the annual output of the economy.

The last time the nation got this close to default was in 2011, when Washington also had a Democratic president and Senate and a Republican-led House.

Congress eventually averted default, but the economy endured heavy shocks, including the first-ever downgrade of the United States’ top-tier credit rating and a major stock sell-off.

The work to raise the debt ceiling is far from done. McCarthy has vowed to give House members 72 hours to read the legislation before bringing it to the floor for a vote. That will test whether enough moderate members support the compromises in the bill to overcome opposition from both hard-right Republicans and progressive Democrats.

Then it will need to pass the Senate, where it will need at least nine Republican votes to succeed. There are multiple opportunities in each chamber along the way to slow down the process.

The two sides had struggled to find common ground on spending levels. Republicans had pushed for an 8% cut to discretionary spending in the next fiscal year, followed by annual increases of 1% for several years.

Biden had proposed keeping spending flat in the 2024 fiscal year, which starts Oct. 1, and raising it 1% the year after that. He also had called for closing some tax loopholes, which Republicans rejected.

(Reporting by Moira Warburton, Steve Holland and Katharine Jackson; Writing by Andy Sullivan; Editing by Scott Malone, Frances Kerry, Daniel Wallis, Heather Timmons)

By Steve Holland, Gram Slattery and Katharine Jackson

WASHINGTON (Reuters) -U.S. President Joe Biden and top congressional Republican Kevin McCarthy have reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling, ending a months-long stalemate.

However, the deal was described in terms that indicated it may not be absolute, and without any celebration — an indication of the bitter tenor of the negotiations, and the difficult path it has to pass through Congress before the United States runs out of money to pay its debts in early June.

“I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people,” McCarthy tweeted.

The deal would raise the debt limit for two years while capping spending over that time, and includes some extra work requirements for programs for the poor.

Biden and McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal.

“We still have more work to do tonight to finish the writing of it,” McCarthy told reporters on Capitol Hill. McCarthy said he expects to finish writing the bill Sunday, then speak to Biden and have a vote on the deal on Wednesday.

The deal will avert an economically destabilizing default, so long as they succeed in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned Friday will occur if the debt ceiling is not raised by June 5.

Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, including new work requirements on some benefit programs for low-income Americans and for funds to be stripped from the Internal Revenue Service, the U.S. tax agency.

They said they want to slow the growth of the U.S. debt, which is now roughly equal to the annual output of the country’s economy.

Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025, sources said.

The two sides have to carefully thread the needle in finding a compromise that can clear the House, with a 222-213 Republican majority, and Senate, with a 51-49 Democratic majority.

One high-ranking member of the hardline House Freedom Caucus said they were in the process of gauging member sentiment, and unsure what the vote numbers might be.

The long standoff spooked financial markets, weighing on stocks and forcing the United States to pay record-high interest rates in some bond sales. A default would take a far heavier toll, economists say, likely pushing the nation into recession, shaking the world economy and leading to a spike in unemployment.

Biden for months refused to negotiate with McCarthy over future spending cuts, demanding that lawmakers first pass a “clean” debt-ceiling increase free of other conditions, and present a 2024 budget proposal to counter his issued in March. Two-way negotiations between Biden and McCarthy began in earnest on May 16.

Democrats accused Republicans of playing a dangerous game of brinkmanship with the economy. Republicans say recent increased government spending is fueling the growth of the U.S. debt, which is now roughly equal to the annual output of the economy.

The last time the nation got this close to default was in 2011, when Washington also had a Democratic president and Senate and a Republican-led House.

Congress eventually averted default, but the economy endured heavy shocks, including the first-ever downgrade of the United States’ top-tier credit rating and a major stock sell-off.

The work to raise the debt ceiling is far from done. McCarthy has vowed to give House members 72 hours to read the legislation before bringing it to the floor for a vote. That will test whether enough moderate members support the compromises in the bill to overcome opposition from both hard-right Republicans and progressive Democrats.

Then it will need to pass the Senate, where it will need at least nine Republican votes to succeed. There are multiple opportunities in each chamber along the way to slow down the process.

The two sides had struggled to find common ground on spending levels. Republicans had pushed for an 8% cut to discretionary spending in the next fiscal year, followed by annual increases of 1% for several years.

Biden had proposed keeping spending flat in the 2024 fiscal year, which starts Oct. 1, and raising it 1% the year after that. He also had called for closing some tax loopholes, which Republicans rejected.

(Reporting by Moira Warburton, Steve Holland and Katharine Jackson; Writing by Andy Sullivan; Editing by Scott Malone, Frances Kerry, Daniel Wallis, Heather Timmons)

By Steve Holland, Gram Slattery and Katharine Jackson

WASHINGTON (Reuters) -U.S. President Joe Biden and top congressional Republican Kevin McCarthy have reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling, ending a months-long stalemate.

However, the deal was described in terms that indicated it may not be absolute, and without any celebration — an indication of the bitter tenor of the negotiations, and the difficult path it has to pass through Congress before the United States runs out of money to pay its debts in early June.

“I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people,” McCarthy tweeted.

The deal would raise the debt limit for two years while capping spending over that time, and includes some extra work requirements for programs for the poor.

Biden and McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal.

“We still have more work to do tonight to finish the writing of it,” McCarthy told reporters on Capitol Hill. McCarthy said he expects to finish writing the bill Sunday, then speak to Biden and have a vote on the deal on Wednesday.

The deal will avert an economically destabilizing default, so long as they succeed in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned Friday will occur if the debt ceiling is not raised by June 5.

Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, including new work requirements on some benefit programs for low-income Americans and for funds to be stripped from the Internal Revenue Service, the U.S. tax agency.

They said they want to slow the growth of the U.S. debt, which is now roughly equal to the annual output of the country’s economy.

Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025, sources said.

The two sides have to carefully thread the needle in finding a compromise that can clear the House, with a 222-213 Republican majority, and Senate, with a 51-49 Democratic majority.

One high-ranking member of the hardline House Freedom Caucus said they were in the process of gauging member sentiment, and unsure what the vote numbers might be.

The long standoff spooked financial markets, weighing on stocks and forcing the United States to pay record-high interest rates in some bond sales. A default would take a far heavier toll, economists say, likely pushing the nation into recession, shaking the world economy and leading to a spike in unemployment.

Biden for months refused to negotiate with McCarthy over future spending cuts, demanding that lawmakers first pass a “clean” debt-ceiling increase free of other conditions, and present a 2024 budget proposal to counter his issued in March. Two-way negotiations between Biden and McCarthy began in earnest on May 16.

Democrats accused Republicans of playing a dangerous game of brinkmanship with the economy. Republicans say recent increased government spending is fueling the growth of the U.S. debt, which is now roughly equal to the annual output of the economy.

The last time the nation got this close to default was in 2011, when Washington also had a Democratic president and Senate and a Republican-led House.

Congress eventually averted default, but the economy endured heavy shocks, including the first-ever downgrade of the United States’ top-tier credit rating and a major stock sell-off.

The work to raise the debt ceiling is far from done. McCarthy has vowed to give House members 72 hours to read the legislation before bringing it to the floor for a vote. That will test whether enough moderate members support the compromises in the bill to overcome opposition from both hard-right Republicans and progressive Democrats.

Then it will need to pass the Senate, where it will need at least nine Republican votes to succeed. There are multiple opportunities in each chamber along the way to slow down the process.

The two sides had struggled to find common ground on spending levels. Republicans had pushed for an 8% cut to discretionary spending in the next fiscal year, followed by annual increases of 1% for several years.

Biden had proposed keeping spending flat in the 2024 fiscal year, which starts Oct. 1, and raising it 1% the year after that. He also had called for closing some tax loopholes, which Republicans rejected.

(Reporting by Moira Warburton, Steve Holland and Katharine Jackson; Writing by Andy Sullivan; Editing by Scott Malone, Frances Kerry, Daniel Wallis, Heather Timmons)

By Steve Holland, Gram Slattery and Katharine Jackson

WASHINGTON (Reuters) -U.S. President Joe Biden and top congressional Republican Kevin McCarthy have reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling, ending a months-long stalemate.

However, the deal was described in terms that indicated it may not be absolute, and without any celebration — an indication of the bitter tenor of the negotiations, and the difficult path it has to pass through Congress before the United States runs out of money to pay its debts in early June.

“I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people,” McCarthy tweeted.

The deal would raise the debt limit for two years while capping spending over that time, and includes some extra work requirements for programs for the poor.

Biden and McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal.

“We still have more work to do tonight to finish the writing of it,” McCarthy told reporters on Capitol Hill. McCarthy said he expects to finish writing the bill Sunday, then speak to Biden and have a vote on the deal on Wednesday.

The deal will avert an economically destabilizing default, so long as they succeed in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned Friday will occur if the debt ceiling is not raised by June 5.

Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, including new work requirements on some benefit programs for low-income Americans and for funds to be stripped from the Internal Revenue Service, the U.S. tax agency.

They said they want to slow the growth of the U.S. debt, which is now roughly equal to the annual output of the country’s economy.

Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025, sources said.

The two sides have to carefully thread the needle in finding a compromise that can clear the House, with a 222-213 Republican majority, and Senate, with a 51-49 Democratic majority.

One high-ranking member of the hardline House Freedom Caucus said they were in the process of gauging member sentiment, and unsure what the vote numbers might be.

The long standoff spooked financial markets, weighing on stocks and forcing the United States to pay record-high interest rates in some bond sales. A default would take a far heavier toll, economists say, likely pushing the nation into recession, shaking the world economy and leading to a spike in unemployment.

Biden for months refused to negotiate with McCarthy over future spending cuts, demanding that lawmakers first pass a “clean” debt-ceiling increase free of other conditions, and present a 2024 budget proposal to counter his issued in March. Two-way negotiations between Biden and McCarthy began in earnest on May 16.

Democrats accused Republicans of playing a dangerous game of brinkmanship with the economy. Republicans say recent increased government spending is fueling the growth of the U.S. debt, which is now roughly equal to the annual output of the economy.

The last time the nation got this close to default was in 2011, when Washington also had a Democratic president and Senate and a Republican-led House.

Congress eventually averted default, but the economy endured heavy shocks, including the first-ever downgrade of the United States’ top-tier credit rating and a major stock sell-off.

The work to raise the debt ceiling is far from done. McCarthy has vowed to give House members 72 hours to read the legislation before bringing it to the floor for a vote. That will test whether enough moderate members support the compromises in the bill to overcome opposition from both hard-right Republicans and progressive Democrats.

Then it will need to pass the Senate, where it will need at least nine Republican votes to succeed. There are multiple opportunities in each chamber along the way to slow down the process.

The two sides had struggled to find common ground on spending levels. Republicans had pushed for an 8% cut to discretionary spending in the next fiscal year, followed by annual increases of 1% for several years.

Biden had proposed keeping spending flat in the 2024 fiscal year, which starts Oct. 1, and raising it 1% the year after that. He also had called for closing some tax loopholes, which Republicans rejected.

(Reporting by Moira Warburton, Steve Holland and Katharine Jackson; Writing by Andy Sullivan; Editing by Scott Malone, Frances Kerry, Daniel Wallis, Heather Timmons)

By Steve Holland, Gram Slattery and Katharine Jackson

WASHINGTON (Reuters) -U.S. President Joe Biden and top congressional Republican Kevin McCarthy have reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling, ending a months-long stalemate.

However, the deal was described in terms that indicated it may not be absolute, and without any celebration — an indication of the bitter tenor of the negotiations, and the difficult path it has to pass through Congress before the United States runs out of money to pay its debts in early June.

“I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people,” McCarthy tweeted.

The deal would raise the debt limit for two years while capping spending over that time, and includes some extra work requirements for programs for the poor.

Biden and McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal.

“We still have more work to do tonight to finish the writing of it,” McCarthy told reporters on Capitol Hill. McCarthy said he expects to finish writing the bill Sunday, then speak to Biden and have a vote on the deal on Wednesday.

The deal will avert an economically destabilizing default, so long as they succeed in passing it through the narrowly divided Congress before the Treasury Department runs short of money to cover all its obligations, which it warned Friday will occur if the debt ceiling is not raised by June 5.

Republicans who control the House of Representatives have pushed for steep cuts to spending and other conditions, including new work requirements on some benefit programs for low-income Americans and for funds to be stripped from the Internal Revenue Service, the U.S. tax agency.

They said they want to slow the growth of the U.S. debt, which is now roughly equal to the annual output of the country’s economy.

Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025, sources said.

The two sides have to carefully thread the needle in finding a compromise that can clear the House, with a 222-213 Republican majority, and Senate, with a 51-49 Democratic majority.

One high-ranking member of the hardline House Freedom Caucus said they were in the process of gauging member sentiment, and unsure what the vote numbers might be.

The long standoff spooked financial markets, weighing on stocks and forcing the United States to pay record-high interest rates in some bond sales. A default would take a far heavier toll, economists say, likely pushing the nation into recession, shaking the world economy and leading to a spike in unemployment.

Biden for months refused to negotiate with McCarthy over future spending cuts, demanding that lawmakers first pass a “clean” debt-ceiling increase free of other conditions, and present a 2024 budget proposal to counter his issued in March. Two-way negotiations between Biden and McCarthy began in earnest on May 16.

Democrats accused Republicans of playing a dangerous game of brinkmanship with the economy. Republicans say recent increased government spending is fueling the growth of the U.S. debt, which is now roughly equal to the annual output of the economy.

The last time the nation got this close to default was in 2011, when Washington also had a Democratic president and Senate and a Republican-led House.

Congress eventually averted default, but the economy endured heavy shocks, including the first-ever downgrade of the United States’ top-tier credit rating and a major stock sell-off.

The work to raise the debt ceiling is far from done. McCarthy has vowed to give House members 72 hours to read the legislation before bringing it to the floor for a vote. That will test whether enough moderate members support the compromises in the bill to overcome opposition from both hard-right Republicans and progressive Democrats.

Then it will need to pass the Senate, where it will need at least nine Republican votes to succeed. There are multiple opportunities in each chamber along the way to slow down the process.

The two sides had struggled to find common ground on spending levels. Republicans had pushed for an 8% cut to discretionary spending in the next fiscal year, followed by annual increases of 1% for several years.

Biden had proposed keeping spending flat in the 2024 fiscal year, which starts Oct. 1, and raising it 1% the year after that. He also had called for closing some tax loopholes, which Republicans rejected.

(Reporting by Moira Warburton, Steve Holland and Katharine Jackson; Writing by Andy Sullivan; Editing by Scott Malone, Frances Kerry, Daniel Wallis, Heather Timmons)