Biden and McCarthy finalise US debt deal, say confident it will pass Congress

Agreement to suspend the US$31.4 trillion debt ceiling until January 1, 2025, is ready to move to Congress for a vote

The deal, if approved, would prevent the US government from defaulting on its debt and comes after weeks of heated negotiations

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President Joe Biden removes his sunglasses as he walks to speak with reporters after returning to the White House in Washington on Sunday. Photo: AP

Published: 7:50am, 29 May 2023Updated: 12:53pm, 29 May 2023

US President Joe Biden and Republican leader McCarthy said that a final bipartisan deal to raise the US debt ceiling - and avoid a cataclysmic default - now heads to Congress, which will need to pass the agreement before the government starts running out of money.

The compromise after weeks of intense talks offers a path back from the precipice, even as the clock is still ticking down to the June 5 “X-date” when the Treasury estimates there might not be enough cash to pay bills and debts.

“I think it’s a really important step forward,” Biden said in a brief appearance before media at the White House on Sunday, urging “both chambers (of Congress) to pass that agreement”.

“It takes the threat of a catastrophic default off the table, protects our hard-earned and historic economic recovery, and... represents a compromise that means no one got everything they want,” Biden added.

The White House said Biden and McCarthy spoke earlier in the day as they struggled to avert a financial precipice which threatened to throw millions of people out of jobs and risk a global meltdown.

McCarthy, for his part, voiced optimism that the bipartisan deal could get through Congress despite skepticism from some lawmakers on both sides of the aisle.