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Exclusive-Slimmed-down U.S. debt ceiling deal takes shape -sources

Published 05/25/2023, 11:59 AM
Updated 05/25/2023, 12:31 PM
© Reuters. Visitors walk on the plaza at the U.S. Capitol in the midst of ongoing negotiations seeking a deal to raise the United States' debt ceiling and avoid a catastrophic default, in Washington, U.S. May 24, 2023.  REUTERS/Jonathan Ernst

By Nandita Bose and Jarrett Renshaw

WASHINGTON (Reuters) -U.S. President Joe Biden and top Republican lawmaker Kevin McCarthy are edging close to a deal on the U.S. debt ceiling, with the parties just $70 billion apart on discretionary spending, according to a person familiar with the talks.

What is likely to emerge will not be a hundreds-page long bill, something that could take lawmakers days to write, read and vote on, but a slimmed-down agreement with a few key numbers, this source and another person briefed on negotiations said.

The expectation is that negotiators will hammer out top line numbers for discretionary spending, including a number for military spending, but leave lawmakers to hammer out the fine details of categories like housing and education through the normal appropriations process in the months ahead, the second source said.

In 2022, U.S. discretionary spending reached $1.7 trillion, accounting for 27% of the overall $6.27 trillion spent, according to federal figures. About half of that was for defense, an area some lawmakers have said should not be cut.

The end result would likely just put guardrails on future budget talks, not spell out detailed spending, sources said.

The White House declined to comment.

On Wall Street, the S&P 500 rose less than a percent, U.S. Treasury bonds fell in price and the U.S. dollar scaled to its highest levels since March as markets digested more optimistic-sounding news on the debt limit from Washington./

Latest comments

Victory for the Liberals. Anything other than SPECIFIC CUTS to vote-buying...er, entitlement programs means kicking the can down the yellow brick road, where the left-wing media (are you listening Reuters?) can write about the harm to Sally Sob-Story.
new lawsuit out - basically will mean debt ceiling is unconstitutional - the GOP's entire hand just went out the window - so they either grow up fast before there's a ruling or they will lose this as a weapon - Biden just got a royal flush dealt
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