Debt Ceiling Agreement Reached, But It’s Not Over Yet
President Joe Biden and House Speaker Kevin McCarthy have reached an agreement in their negotiations to resolve the debt crisis. That’s the good news. On the flip side, though, the road ahead to obtain approval in Congress appears to have a few substantial obstacles that will need to be navigated before June 5–the projected date for Treasury funds to run dry.
Both sides in the negotiation expressed confidence that the objections and stumbling blocks on both sides of the aisle will be resolved in time for Treasury to continue operations. The House Rules Committee will be the first official hurdle, reviewing the 99-page bill at 3:00 pm today. In the meantime, Social Security beneficiaries and the financial markets will wait in suspense to see if there’s any disruption to the flow of benefit payments in early June. Despite some Committee members strongly voicing opposition, both Biden and McCarthy remain assured that the votes will be there to pass the bill on to the President for final approval.
The results of the negotiation have culminated in the “Fiscal Responsibility Act of 2023,” the full text of which can be viewed here. At its core is suspension of the $31.4 trillion borrowing limit for a period to extend beyond the 2023 presidential election cycle. As drafted, the bill would preclude cuts to defense, Social Security, Medicare, and veterans’ programs.