Biden and McCarthy Reach Spending Agreements, NPR Source Says: NPR

House Speaker Rep. Kevin McCarthy, R-California, speaks to members of the media after arriving at the United States Capitol on Friday.

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House Speaker Rep. Kevin McCarthy, R-California, speaks to members of the media after arriving at the United States Capitol on Friday.

Win McNamee/Getty Images

Negotiators have worked out some details of an agreement to prevent the country from defaulting on its debt the next day, according to a source familiar with the talks.

The contours of a debt ceiling deal are largely worked out — including on discretionary spending and defense spending — but sticking points include work requirements and permits, the source told NPR. .

House Speaker Kevin McCarthy told reporters Friday morning it was “the critical moment.”

“We know it’s not easy, but we’re going to make sure we’re not just trying to get a deal,” he said. “We’re trying to get something that’s worthy of the American people and that changes the trajectory.”

The deal being worked out by negotiators would increase the government’s borrowing limit by two years, while capping federal spending at two years, said the source, who was not authorized to speak about ongoing negotiations. . Preliminary details were first reported by The New York Times.

The two sides are also close to an agreement on funding for the IRS, which Republicans hope to cut. But both sides are dug in on work requirements for benefits programs.

On Monday, Treasury Secretary Janet Yellen reiterated the warning that Congress has until around June 1 to raise or suspend the debt ceiling. McCarthy pledged to give members 72 hours to review the text before putting it to a floor vote. The Senate will then have to vote on the measure if it passes the House.

Most economists agree that an actual default could lead to a recession. A default would severely affect financial markets, raise mortgage rates and credit card interest rates, could prevent government employees and Social Security recipients from paying, and could make it difficult for businesses and citizens to ‘To borrow money.

McCarthy told reporters Friday that negotiators worked through Thursday night, and he thinks they’ve made some progress.

“There is progress forward, but every time there is progress forward, the issues that remain get harder and harder,” said Rep. Patrick McHenry, one of the negotiators. of McCarthy, to reporters on Friday afternoon.

Administration negotiators are not currently scheduled to meet with McCarthy in person on Friday, McHenry said, but the two groups continue to talk virtually.