White House, Republicans reach tentative debt ceiling deal

The White House reached a tentative deal with Republicans on Saturday night to raise the debt ceiling for two years, thus avoiding a catastrophic default.

President Biden tweeted that the deal "is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone." Biden added that the agreement "represents a compromise, which means not everyone gets what they want."

House Speaker Kevin McCarthy (R-Calif.) tweeted that the two sides have "come to an agreement in principle that is worthy of the American people." McCarthy also tweeted that the deal reached was a "responsible debt limit agreement that stops Democrats' reckless spending, claws back unspent COVID funds, blocks Biden's new tax schemes, and much, much more."

All of the details have yet to be hammered out, but McCarthy told reporters that the full outline of the new budget would be available on Sunday. The budget was finally agreed to after months of back-and-forth talks between the two sides.

Treasury Secretary Janet Yellen said Friday that the deadline for raising the debt ceiling had been extended to June 5, bumping it back four days from the initial June 1 cutoff date. In a letter to Congress, Yellen estimated that June 5 would have been the last day that the Treasury would have enough funds to satisfy the U.S. government's obligations. The government is scheduled to make an additional $92 billion in payments, Yellen estimated, including Social Security and Medicare payouts totaling $36 billion, which the debt ceiling increase will now allow it to do.

Even as a potential default loomed, President Biden was optimistic that a deal would be reached. Departing Friday for a Memorial Day weekend at Camp David, Biden told reporters, "It's very close, and I'm optimistic," in regards to a compromise.

Updated May 27, 2023: This article has been updated to reflect the debt ceiling deal.