Biden says final US debt ceiling deal ready to move to Congress for vote

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US President Joe Biden said on Sunday he had finalised a budget agreement with House Speaker Kevin McCarthy to suspend the US$31.4 trillion (S$42.5 trillion) debt ceiling until Jan 1, 2025, and that the deal was ready to move to Congress for a vote.

“This is a deal that’s good news for… the American people,” Mr Biden told reporters at the White House after a call with Mr 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,” Mr Biden said.

The deal preventing the United States government from defaulting on its debt – which would have been a first in history – comes after weeks of heated negotiations between Mr Biden and House Republicans.

It still needs to pass through a narrowly divided Congress before June 5, when the US Treasury says it would run short of money to cover all of its obligations.

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

The deal has drawn fire from hardline Republicans and progressive Democrats, but Mr McCarthy earlier on Sunday predicted he would have the support of a majority of his fellow Republicans.

The agreement would suspend the debt limit through Jan 1, 2025, cap spending in the 2024 and 2025 budgets, claw back unused Covid-19 funds, speed up the permitting process for some energy projects and include extra work requirements for food aid programmes for poor Americans.

The Bill would authorise more than US$886 billion for security spending in fiscal year 2024 and over US$703 billion in the non-security spending category for the same year, not including some adjustments, according to the text. It would also authorise a 1 per cent increase for security spending in fiscal year 2025.

Senate Republican leader Mitch McConnell in a statement applauded the agreement and called on the Senate to act swiftly to pass it without unnecessary delay.

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

But members of the Republican hardline House Freedom Caucus said they would try to prevent the agreement from passing the House in a vote expected on Wednesday.

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