Biden and McCarthy close to deal on debt ceiling hike

Biden, McCarthy close to raising debt ceiling, capping spending for 2 years Republican and White House negotiators are closing in on a deal to raise the debt ceiling and cap federal spending for two years as time runs out to prevent the U.S. from defaulting, according to people familiar with the matter. The two sides have narrowed differences in the negotiations in recent days, but the details agreed upon are tentative and no final deal has been reached. The two sides have yet to agree on the amount of the cap. Under the terms of the emerging deal, defense spending would be allowed to rise 3% next year, under President Joe Biden’s budget request. The deal also includes a measure to upgrade the nation’s power grid to accommodate renewable energy, a key climate goal, while speeding up permits for pipelines and other fossil fuel projects backed by the GOP, according to people familiar with the deal. The deal would cut $10 billion from an $80 billion budget increase for the Internal Revenue Service that Biden won under the Inflation Control Act. Republicans have warned of a wave of middlemen and audits, while Democrats say the increase will offset itself through less tax evasion.