Biden and McCarthy agree debt ceiling deal
The White House and the Republicans have agreed in principle to raise the United States debt ceiling and avert a default after weeks of bitter negotiations. The deal still needs to be approved by a divided United States Congress.
US President Joe Biden described the agreement as a 'compromise', while House Speaker Kevin McCarthy said it 'has historic reductions in spending'.
The US Treasury earlier warned the country would run out of money to pay its bills on 5 June without a deal. The United States must borrow money to fund the government because it spends more than it raises in taxes.
Republicans have been seeking spending cuts in areas such as education and other social programmes in exchange for raising the 31.4tn US dollar debt limit, a law that caps how much debt the US government can accrue.
Senior party members have said they will not raise the debt ceiling unless the government reduces its spending in the years ahead, while Democrats have countered with proposals to raise certain taxes.
Details of the new deal have not officially been released - but reported that non-defence government spending would be kept flat for two years and then rise by 1% in 2025.
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