BREAKING NEWS! THE DEBT DEAL IS ACCOMPLISHED!!

From the New York Times”

Top White House and Republican negotiators on Saturday reached an agreement in principle to raise the debt limit for two years while cutting and capping some government spending over the same period, a breakthrough after a marathon set of crisis talks that has brought the nation within days of its first default in history.

The compromise, which would effectively freeze federal spending that had been on track to grow, had the blessing of both President Biden and Speaker Kevin McCarthy, raising hopes that it could break the fiscal stalemate that has gripped Washington and the nation for weeks, threatening an economic crisis. The two spoke by phone on Saturday evening to resolve final sticking points.

It was structured with the aim of enticing votes from both parties, though it would most likely draw the ire not only of conservative Republicans but also Democrats furious at being asked to vote for cuts they oppose with the threat of default looming. Still, it gives Republicans the ability to say that they succeeded in reducing some federal spending — even as funding for the military and veterans’ programs would continue to grow — while allowing Democrats to say they spared most domestic programs from significant cuts.

According to a person familiar with the agreement, the deal also would impose new work requirements for some recipients of government aid, including food stamps and the Temporary Assistance for Needy Families program. It would put new limits on the amount of time that certain recipients of food stamps — people under the age of 54, who do not have children — could benefit from the program. But it also would expand food stamp access for veterans and the homeless.

The tentative deal also claws back some unspent money from a previous pandemic relief bill, and reduces by $10 billion new enforcement funding for the I.R.S. to crack down on tax cheats. It includes measures meant to speed environmental reviews of certain energy projects.

To avert a default, the House and the Senate must pass the deal and send it to Mr. Biden for his signature. That promises to be a heavy lift for both Mr. McCarthy and Mr. Jeffries, who must now cobble together a coalition of Republicans and Democrats.

Mr. McCarthy has repeatedly said he believes a majority of his conference would vote for the deal, but it is not clear yet how many Republicans will back the compromise — and how many Democrats might be needed to vote for it to make up for G.O.P. defections.

The cuts in the package are almost certainly both too modest to win the votes of hard-line conservatives, and too stringent to win the votes of progressives in the House. Lawmakers in the House Freedom Caucus and the Congressional Progressive Caucus had already begun to fume about the emerging contours of a deal before negotiators finalized the agreement.

White House officials privately described discretionary spending outside of defense programs as roughly equivalent to what would have been spent if Congress had failed to agree on new funding bills for the next fiscal year and instead continued government operations at the same funding levels as this year.

TC note: it’s going to be interesting to see just how many “centrist” and “front line” Democrats there are, and how many “responsible Republicans” there are in Congress.

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