Back

May 30, 2023

White House, Congressional Leaders Reach Debt Ceiling Deal

President Joe Biden and Speaker of the U.S. House of Representatives Kevin McCarthy (R-Calif.) announced on Saturday evening that Democrat and Republican leaders had reached a deal to raise the federal debt ceiling, or borrowing limit.

Lawmakers are likely to vote on the package by early next week. Time is of the essence. If Congress does not approve legislation to raise the limit soon, the federal government will default on its obligations, throwing markets into chaos.

The legislative deal would:

  • Raise the ceiling for two years;
  • Reduce federal spending by about $650 billion over the next 10 years by rolling back non-defense discretionary spending to fiscal year 2022 levels and limiting topline federal spending to one percent annual growth for six years.;
  • Boost domestic energy production by putting a federal single agency in charge of developing final environmental reviews under a strict public timeline;
  • Rescind unspent funds appropriated to combat the COVID-19 pandemic;
  • Impose new work requirements for some recipients of federal government aid, including the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF); and
  • Impose limits on the duration of time that certain SNAP recipients can receive those benefits from the program.

While Democrat and Republican leadership have agreed to this outline, it is unclear whether rank-and-file lawmakers in either party will support it. Some Republican lawmakers have argued the spending cuts do not go deep enough while House progressives strongly oppose the work requirements.

The legislation will need support from lawmakers in both parties to make it to President Biden’s desk. According to press reports, under the deal hammered out this weekend, House Democrats are expected to provide at least 100 votes. Leaders in both parties will have to coordinate across the aisle to ensure they have at least 218 votes in House and 60 votes in the Senate when lawmakers vote later this week.

Under U.S. House rules, lawmakers in that chamber have 72 hours to review the text of the legislation. The bill also is subject to Senate filibuster rules, so debate will take a few days in that chamber as well.

House Speaker McCarthy has insisted Congress will send a final piece of legislation to President Biden by June 5, which is the date that U.S. Treasury Secretary Janet Yellen has said the federal government will breach the debt limit. On that day, the U.S. government will have an estimated $92 billion in payments due, including $36 billion in Social Security and Medicare benefits, but would have inadequate resource to satisfy all of these obligations.

Want to keep up with the latest information on the debt ceiling debate? Visit this page from the U.S. Chamber of Commerce.

To search, type what you're looking for and results will appear automatically