U.S. Republicans in Congress are working on a debt ceiling vote

WASHINGTON, May 29 (Reuters) – Republicans on Monday laid out plans in the House of Representatives to advance a debt ceiling deal with Democratic President Joe Biden from Tuesday, with the aim of passing it through Congress before the U.S. government runs out of money too soon. Next week.

The House Rules Committee said it would take up the deal Tuesday afternoon, paving the way for a vote by the Republican-controlled chamber.

The package must also pass the Democratic-controlled Senate before Biden can sign it into law.

The U.S. Treasury Department says the U.S. could default on its obligations by June 5 if Congress doesn’t act.

The prospects are uncertain because lawmakers on the left and right have opposed the deal. Representative Raul Grijalva, a progressive Democrat, wrote on Twitter that its changes to environmental rules were “disturbing and deeply disappointing.”

The newsletter Punchbowl, citing Republican sources, said preliminary estimates from the nonpartisan Congressional Budget Office suggested the deal could save up to $2 trillion if its spending limits were kept in place for six years, though much of that would depend on which party controls Congress. At the time. It’s unclear when the CBO will release its official estimate.

The 99 page bill It would suspend the debt ceiling until Jan. 1, 2025, allowing lawmakers to shelve the politically sensitive issue until after the November 2024 presidential election.

It would limit discretionary spending over the next two fiscal years, roll back unused Covid-19 funds, speed up the approval process for some energy projects and tighten work requirements for food assistance programs for poor Americans.

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It would shift some funding from the Internal Revenue Service, which collects the tax, though White House officials say it shouldn’t slow down enforcement anytime soon.

House Speaker Kevin McCarthy, who has negotiated with Biden, predicted it would win support from his fellow Republicans. House Democratic Leader Hakeem Jeffries said he expects support from across the aisle.

This would be met with overwhelming support in the rules committee, which is usually closely aligned with the House leadership. McCarthy was forced to include some skeptical conservatives as the price of the Speaker’s victory.

McCarthy told reporters on Monday that he wasn’t worried about the package’s prospects at the board.

The initial reaction was positive from financial markets, which would be thrown into chaos if the US, which forms the bedrock of the global financial system, is unable to pay on its bonds.

But some investors are wary that the spending cuts championed by McCarthy could weigh on U.S. growth. Investors are bracing for potential volatility in the US bond market.

Republicans have argued that steep spending cuts are necessary to control the growth of the national debt, which equates to $31.4 trillion in annual economic output.

Interest payments on that debt are expected to eat up a growing share of the budget in coming decades, as an aging population raises health and pension costs, according to government forecasts.

The agreement does nothing to limit fast-growing projects. Most of its savings will come from limiting spending on domestic programs such as housing, border control, scientific research and other types of “prudent” spending. Military spending will be allowed to increase over the next two years.

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Andy Sullivan reports; Additional reporting by Gram Slattery; Editing by Andrea Ricci

Our Standards: Thomson Reuters Trust Principles.

Kanishka Singh

Thomson Reuters

Kanishka Singh is a Reuters correspondent based in Washington, DC, primarily covering US politics and national affairs in her current role. His past breaking news coverage spans topics as diverse as the Black Lives Matter movement; US elections; 2021 Capitol riots and their follow-up investigations; Brexit deal; US-China trade tensions; NATO withdrawal from Afghanistan; the covid-19 pandemic; And a 2019 Supreme Court ruling on a religious dispute site in his native India.

Andy Sullivan

Thomson Reuters

Andy covers politics and policy in Washington. His work has been cited in Supreme Court briefs, political attack ads and at least one Saturday Night Live skit.

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