On Sunday, President Joe Biden and House Speaker Kevin McCarthy reached a final agreement in principle to increase the country’s debt ceiling.
“The agreement takes the threat of a catastrophic default off the table and prevents the worst possible crisis, a default, for the first time in our nation’s history,” said Biden at the White House, adding, “No one got everything they want. But that’s the responsibility of governing. So I strongly urge both chambers to pass that agreement.”
The legislative text will be finalized over the next few days by the negotiating teams, after which the House and Senate will consider the agreement.
Bloomberg reported that by early Monday morning, Biden’s cabinet members had made individual lobbying calls to at least 60 House Democrats, with the deal raising the borrowing limit for two years past the 2024 election and enabling the government to curb spending during that period. The bond market is now focused on concerns over the deluge of Treasury Bills expected to hit the market as the Treasury Department is set to sell over $1 trillion of bonds through the end of the third quarter to replenish its coffers.
House Republicans posted the bill on Sunday, and a House vote is expected on Wednesday, May 31. GOP leaders have pledged to ensure that the text is reviewed for 72 hours before the vote. Earlier this month, the Treasury Department’s measures to help keep the government’s bills paid have declined from $110 billion to $88 billion. As a result, a risk of running out of headroom as soon as June 1 looms, and the department may be unable to meet the government’s obligation, according to Treasury Secretary Janet Yellen.