“Advances” in debt ceiling negotiations

The top Republican in Congress, Kevin McCarthy, said on Saturday that “progress” was being made in negotiations with Democratic President Joe Biden on raising the federal government’s debt ceiling, as the country faces the risk of suspension of payments in just over a week.

Time is short. The Treasury Department said on Friday that the government would run out of funds to pay all of its bills by June 5 if Congress doesn’t act, a slightly longer but more certain timeframe than its previous default forecast for June 1.

Any agreement in principle between Democratic President Joe Biden and top Republican Congressman Kevin McCarthy will be the start of what could easily be a week-long legislative process in a highly divided and polarized Congress.

“We don’t have an agreement,” McCarthy told reporters. “We’re not there yet. We’ve made progress, we’ve worked well into the morning. And we’re back at it now.”

Hardline Republicans in the House of Representatives have threatened to block any bill that falls short of their expectations, including deep spending cuts.

Progressive Democrats have also threatened to withhold their support for some of the compromises put forward, particularly around the imposition of new work requirements in federal anti-poverty programs.

“It’s very close and I’m optimistic,” Biden told reporters on Friday.

Republicans control the House of Representatives by a 222-213 margin, while Democrats hold a 51-49 majority in the Senate, leaving a narrow path to signing any agreement between the Democratic president and the Republican leader into law.

Republicans have tried to slash government spending over the next 10 years to slow the growth of US debt, which currently equals the economy’s annual output. But the tentative deal is likely to fall short of its goal.

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