Biden and McCarthy reach ‘in principle’ deal to raise debt ceiling days before US default

Joe Biden and the House Republican speaker, Kevin McCarthy, have reached a deal in principle to raise the federal government’s $31.4tn debt ceiling, with just days left before America was expected to default.

“I expect to finish the writing of the bill, checking with the White House and speaking to the president again tomorrow afternoon, and then posting the text of it tomorrow, and then we vote on it on Wednesday,” McCarthy said.

Biden on Saturday called the agreement “an important step forward,” and characterised it as a compromise that nevertheless protected Democrats’ key priorities.

Full details of the agreement remained unconfirmed, but it was reported that the deal would raise the debt limit for two years, averting any further standoffs until after the 2024 presidential election.

According to McCarthy there are no new taxes and the bill includes “historic reductions in spending, consequential reforms that will lift people out of poverty and into the workforce.”

The deal still needs to receive approval from the divided Congress, and McCarthy will probably need some support from Democratic members to get the proposal through the House, given Republicans’ narrow majority in the lower chamber.