White House and House Republican negotiators are inching closer to reaching an agreement that would prevent a government default by raising the debt ceiling for about two years and implementing a two-year cap on federal spending at fiscal year 2023 levels, CBS News reported Thursday.
According to the report, the potential deal would increase spending on veterans’ and defense programs in 2024, raise all discretionary spending by 1 percent in FY 2025 and reduce non-defense discretionary spending, particularly in health care and education areas.
The proposal would include shifting about $10 billion of the $80 billion funding plan to non-defense discretionary funding. The plan was approved by Congress for the Internal Revenue Service under the Inflation Reduction Act.
The White House had proposed a measure to cancel up to $30 billion in unspent funds meant for COVID-19 relief efforts.
House Speaker Kevin McCarthy recently expressed optimism that an agreement could be reached over the borrowing limit.
On May 15, Treasury Secretary Janet Yellen sent a letter to congressional leaders warning that her department could default on its obligations if Congress fails to increase or suspend the debt limit as early as June 1.