White House, Republicans reach deal on debt limit

Sticking point

One big sticking point appeared to be a Republican effort to expand existing work requirements for recipients of food stamps and other federal aid programs, a longtime Republican goal that Democrats have strongly opposed.

Biden has indicated he will not consider a GOP proposal to impose new work requirements for Medicaid, a healthcare program for low-income and disabled people. Asked on Friday if he would bow to Republican demands on work requirements, Biden said, "I don't bow to anybody," and the White House put out a statement calling proposed requirements cruel and ineffective.

Louisiana Representative Garret Graves, who has been taking part in the talks, said there was "not a chance" that Republicans may give in on the work requirements issue.

"It comes down to whether or not we're going to default on the American debt, we're going to default on seniors on Social Security or Medicare or have the Democrats continue to say we're going to prioritize welfare payments for people that are refusing to work," he said.

The Republican proposal on work requirements would save $11 billion over 10 years by raising the maximum age for existing standards that require able-bodied adults who do not live with dependents to work or attend training programs.

Current law applies those standards to recipients under the age of 50. The Republican plan would raise the age to include adults 55 and under. It would lower the number of exemptions that states can grant to some recipients subject to those requirements.

If new work requirements are in a deal Biden could lose support from progressive Democrats, making the agreement harder to pass in the narrowly divided House of Representatives. Progressive lawmakers and members of the Congressional Black Caucus have indicated they would probably vote against a bill that strengthens work requirements.

Pressure is on McCarthy from the House's conservative members not to give in to any deal, even if it means blowing past the June 5 deadline.

Also, up for discussion is rescinding some of the $80 billion Congress approved last year to expand the Internal Revenue Service, which the agency had planned to use to boost tax enforcement and modernize its technology. Republicans voted earlier this year to take back most of the money, which would increase the budget deficit because it would shrink tax revenue.

Democrats say the money is needed so the government can reverse a decade of attrition at the tax agency, hiring thousands of new auditors and directing them at high-income households and large corporations. Republicans are against the additional IRS money, saying the agency cannot be trusted and that more audits would ultimately burden small businesses and middle-income citizens.

Agencies and Xinhua contributed to this story.