Negotiators reach debt limit agreement in principle – JP

The White House and top Republicans reached an agreement in principle Saturday to raise the statutory debt ceiling and set caps on discretionary spending, according to sources familiar with the talks.

Legislative text was still being drafted, according to sources, but the plan was to release it for House lawmakers to review 72 hours before they’d have to vote on it.

The Treasury Department estimates that after June 5, it starts to become difficult to guarantee all U.S. financial obligations can be paid on time. If payments are missed, it could lead to a U.S. credit downgrade, higher interest rates and steep spending cuts that some analysts say could tip the economy into recession.