Amid growing fears of a possible default in early June, US President Joe Biden and Republican Kevin McCarthy reportedly reached a “substantive agreement” to boost the federal government’s debt ceiling to $31.4 trillion.
According to May 28 report from Reuters, citing “two sources acquainted with the negotiations,” the “preliminary” deal was reached after a 90-minute phone call between Biden and McCarthy on May 27.
“The White House and House Republican negotiators have reached an agreement in principle to stop debt default,” the sources say.
However, one source reported that there are still several elements of the deal to be finalized, stating:
“But I’m undecided it’s completely settled. There could also be one or two little things they should finish. But close enough to maneuver forward.”
It was reported that the deal would prevent an “economically destabilizing insolvency”. It stressed that the deal should be passed by Congress before the Treasury “runs out of cash” – which it recently warned can be on June 5 if the debt ceiling was not raised.
It added that “the precise details of the deal weren’t immediately available.”
This is an evolving story and more information can be added because it becomes available.
