- The debt-limit deal between President Joe Biden and Speaker Kevin McCarthy is nearing a vote in the House of Representatives, following a key procedural step. The House Rules committee advanced legislation to suspend the US borrowing ceiling and limit federal spending, with a 7-6 margin. The bill is now set for a final vote by the full House.
Congress is rushing to approve the measure before June 5 to avoid US default, but faces opposition from members. The bipartisan Problem Solvers Caucus has backed the legislation. US Treasuries gained for a second day as traders assessed the debt-ceiling accord's impact on future Fed policy decisions, with the 10-year note yield dropping to 3.66%.
Why it matters
The bill sets federal spending for two years, suspends the debt ceiling until Jan. 1, 2025, and avoids a borrowing clash before the election. Biden and McCarthy lobbied their parties for its passage. Democrats agreed to spending caps in exchange for Republican votes. The White House sees a $1 trillion spending reduction over a decade, while Republicans claim it's double that. The Congressional Budget Office estimates a $1.5 trillion deficit reduction over 10 years.