Washington — Negotiators for President Biden and Republican congressional leaders on Saturday nightan 11th-hour agreement in principle to raise the . Both sides came to the tentative agreement after weeks of delays that rattled markets and raised fears about a catastrophic default.
Mr. Biden and McCarthy had spoken by phone earlier Saturday evening after hours of marathon negotiations.
In a statement, Mr. Biden said the deal "protects my and Congressional Democrats' key priorities and legislative accomplishments," adding that it "represents a compromise, which means not everyone gets what they want. That's the responsibility of governing."
McCarthy had been at the Capitol all weekend, and he told reporters Saturday morning that he was "optimistic" a deal would be reached.
"I just got off the phone with the president a bit ago," McCarthy tweeted. "After he wasted time and refused to negotiate for months, we've come to an agreement in principle that is worthy of the American people."
In a brief news conference following the deal, McCarthy said that he expects the text of the bill to be publicly posted by Sunday, and a House vote to take place Wednesday. He also said he would speak to Mr. Biden again on Sunday.
The exact details of the deal were not immediately clear, although CBS News learned that it would raise the debt limit for two years and keep non-defense spending flat — at 2023 fiscal year levels — for two years as well. Under the deal, non-defense spending would then increase by 1% in the 2025 fiscal year.
The deal also maintains funding for veterans' medical care programs, including the PACT Act, which was passed last year and expands benefits to 3.5 million veterans whoto toxic burn pits during wartime. Per the deal, the PACT Act's Toxic Exposure Fund will keep its funding through at least 2025.
Work requirementsa major sticking point in the negotiations. While the deal included no drastic changes to Medicaid, it was still unclear exactly how the Supplemental Nutrition Assistance Program (SNAP), and the Temporary Assistance for Needy Families (TANF) program, would be impacted.
Republican House leadership informed rank-and-file GOP members of the deal in a late-night conference call, two sources familiar with the talks told CBS News. Biden administration officials were planning to hold a Zoom call with Democratic House members on Sunday evening. Mr. Biden spoke by phone to Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries just prior to the announcement of the deal.
The breakthrough came just days before the government was expected to exhaust the ability to pay its bills, an unprecedented event that would send shockwaves through the global economy. Treasury Secretary Janet Yellen on Fridaythe estimated deadline on the so-called "x-date" from June 1 to June 5, giving negotiators some breathing room.
The risk of default remains, given the slim margin for error for crafting and passing the bill in Congress. Lawmakers must now transform the agreed-upon provisions into actual legislative text, a process that typically takes several days. It must then pass both chambers of Congress, overcoming expected opposition from members of both parties.
Conservatives have demanded drastic spending cuts in exchange for raising the debt ceiling, which Democrats have said should be raised without conditions. Passing the agreement in the House will likely require the votes of dozens of Democrats to offset conservative Republicans who vote against the measure. Some progressives have also vowed to oppose any bill that cuts spending too deeply.
The House and Senate are both recessed for the Memorial Day holiday, further complicating the timeline for passing a bill. Congressional leaders have warned their respective members to be prepared to return to Washington on short notice to vote on a deal.
White House officials and McCarthy's representativesat the Capitol and White House on-and-off for days to hammer out the details of a deal since Mr. Biden reengaged on the issue, after insisting he would not negotiate on raising the debt ceiling.
House Republicans passed a bill in April that represented their opening negotiating position. That legislation would have lifted the debt limit by $1.5 trillion or until the end of March 2024, and cut federal spending to the tune of $4.5 trillion. Democrats accused Republicans of trying to slash programs for those in need.
McCarthy and Mr. Biden met several times over the past few weeks to try to resolve their differences when talks appeared to reach an impasse, and both described their meetings as "productive." But hammering out details they could agree on and sell to their constituencies proved difficult.
Before a deal was struck, for instance, Republican Sen. Mike Lee of Utah said he would "use every procedural tool at my disposal to impede a debt-ceiling deal that doesn't contain substantial spending and budgetary reforms."
Yellen hasthat is when the U.S. will likely be unable to pay its bills.
"It seems almost certain that we will not be able to get past early June," Yellen said during a virtual appearance with the Wall Street Journal's CEO Council Summit on Wednesday.
— Ed O'Keefe and Zak Hudak contributed to this report.