The $31.4 trillion debt ceiling will be suspended until Jan. 1, 2025 thanks to a budget deal that U.S. President Joe Biden reached with House Speaker Kevin McCarthy on Sunday. Biden declared the accord to be ready for a vote in Congress.

“This is a deal that’s good news for … the American people,” Biden told reporters at the White House after a call with McCarthy to put the final touches to a tentative deal they struck on Saturday night.

“It takes the threat of catastrophic default off the table, protects our hard-earned and historic economic recovery,” Biden said.

After weeks of tense discussions between Biden and House Republicans, an agreement has been reached that, if ratified, will stop the United States government from going into default on its debt.

Before June 5, when the U.S. Treasury claims it would run out of money to pay all of its debts, it still needs to pass through a closely divided Congress.

“I strongly urge both chambers to pass that agreement,” Biden said, adding that he expected McCarthy to have the necessary votes for the deal to pass.

Hardline Republicans and liberal Democrats have criticised the agreement, but Biden and McCarthy are counting on support from both groups to pass it.

Earlier on Sunday, McCarthy believed he would have the backing of most of his fellow Republicans, and Hakeem Jeffries, the leader of the House Democrats, stated he anticipated Democratic support.

Through January 1, 2025, the debt ceiling would be suspended. Additionally, the agreement would control expenditure in the 2024 and 2025 budgets, recover unused COVID monies, expedite the regulatory process for select energy projects, and include additional job requirements for food assistance programmes for low-income Americans.

The 99-page law, excluding some amendments, would authorise more than $886 billion in security expenditures for fiscal year 2024 and more than $703 billion in non-security expenditures. Additionally, it would approve a 1% increase in security spending for the 2025 budgetary year.

Mitch McConnell, the leader of the Senate’s Republican party, praised the agreement and urged the Senate to move quickly to ratify it after the House had done so.

“Today’s agreement makes urgent progress toward preserving our nation’s full faith and credit and a much-needed step toward getting its financial house in order,” McConnell said.

In a House vote scheduled for Wednesday, members of the conservative Republican Freedom Caucus declared they would work to stop the accord from passing.

“We’re going to try,” Representative Chip Roy, a prominent Freedom Caucus member, said in a tweet.

Threats from inside his own party were ignored by McCarthy, who said that “over 95%” of House Republicans were “overwhelmingly excited” about the deal.

“This is a good strong bill that a majority of Republicans will vote for,” the California Republican told reporters in the U.S. Capitol. “You’re going to have Republicans and Democrats be able to move this to the president.”

McCarthy promised to allow any single House member to ask for a vote to remove him in exchange for the speaker’s gavel, potentially leaving him up to challenge from dissatisfied Republicans. Nevertheless, he has stated throughout the debt ceiling discussion that he is “not at all” concerned about such scenario.

Republicans hold a 222-213 majority in the House, while Democrats hold a 51-49 advantage in the Senate. Due to the close margins, the bill will need the backing of moderates from both parties if it is not blocked by hardliners in one or both parties.

“I’m not happy with some of the things I’m hearing about,” Representative Pramila Jayapal, who chairs the Congressional Progressive Caucus, told CNN’s “State of the Union.”

She applauded the agreement, claiming it will protect Medicaid from benefit cuts while enlarging the safety net to include homeless people and veterans. In reference to Biden’s modest loan forgiveness programme, she added, “We kept the student debt responsibility that we have.”

Progressive Democrats in both houses had declared that they would oppose any agreement that included increased labour requirements for government food and healthcare programmes.

Some persons aged 50 to 54 will have to perform job requirements in order to get food assistance under the agreement, but White House officials claimed that due to the carefully worded text, roughly the same number of people would be subject to the requirements as is the case under existing law.

(Adapted from AlJazeera.com)

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