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Exclusive: Slim US debt ceiling deal takes shape -sources

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WASHINGTON, May 25 (Reuters) – U.S. President Joe Biden and top Republican lawmaker Kevin McCarthy are nearing a deal on the U.S. debt ceiling, with the two sides just $70 billion apart on discretionary spending, according to a person familiar with the matter the negotiations.

What is likely to emerge will not be a hundred-page bill, something that could take lawmakers days to write, read and vote on, but a slimmed-down deal with a few key figures, said this source and another person who informed about negotiations.

The expectation is that negotiators will hammer out top-line figures for discretionary spending, including a figure for military spending, but leave it to lawmakers to hammer out the finer details of categories such as housing and education through the normal appropriations process in the coming months, the second source said.

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

Estimated US government discretionary spending for fiscal year 2023, in billions of US dollars

The final outcome would likely just put a damper on future budget negotiations, not spell out detailed spending, sources said.

The White House declined to comment.

On Wall Street, the S&P 500 (.SPX) rose less than 1 percent, U.S. Treasuries fell in price and the U.S. dollar (.DXY) fell to its highest levels since March as markets digested more optimistic-sounding debt limit news from Washington./

Reporting by Jarrett Renshaw and Nandita Bose; Additional reporting by Trevor Hunnicutt; Editing by Heather Timmons and Alistair Bell

Our standards: Thomson Reuters Trust Principles.

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