♪ . i'm margaret brennan in washington. this week on "face the nation" -- breaking overnight, the white house and congressional republicans reach a deal in principle on the debt limit, but will they find the votes to pass it in time to head off a default? final a broke through in washington. house speaker kevin mccarthy told reporters late last night he and president biden had agreed on a two-year post-2024 extension of the nation's debt limit and that both sides had made concessions. >> historic reductions in spending, you consequential are reforms lifting people out of

poverty, limiting government overreach. >> the plan has the potential for nos on the far right and left in the house. exactly what president bidenfeee >> you have to be in position where we can sell it to our constituencies. we're pretty well divided in the house, almost down the middle, and it's not any different in the senate. >> we'll talk to the top democrat in the house, leader hakeem jeffries. to an ally of mccarthy's congressman french hill. austan gollsbee will weigh in on the economic impact. a closer look at the growing concerns of a.i. with the president of microsoft, brad smith, an analysis from cbs news cyber security expert chris krebs. a tribute to the class of 2023, a generation of graduates who face down some unprecedente e naon."s. ce

♪ good morning. and welcome to "face the nation." with just eight days to go before treasury secretary janet yellen says the u.s. will be forced to default on its spending obligation, there is a deal in principle to head off the crisis. the bill is still being written, and we are short on details at this point, but it will include a temporary cap on spending in areas other than defense, veterans or entitlements. the plan would expand work requirements for able-bodied adults who receive some government benefits including food stamps, but not for medicaid recipients, and it calls for clawing back some unspent money from covid relief funds. leaders in both the house and senate will now have to convince their members to vote for the bill, and we are seeing signs just in the last hour that it could be a tough challenge for

both sides. house democratic leader hakeem jeffries joins us now from his district in brooklyn. good morning to you. let's get straight to it. can you deliver a majority of democrats? >> well, good morning, margaret. i do look forward to the white house briefing that's going to take place later on this afternoon with the house democratic caucus. we'll be able to have a robust discussion. let me say this, president biden has delivered a result that avoids a catastrophic default, that prevents us from -- our economy crashing and stops the extreme maga republicans from triggering a job killing recession, which, as we've seen over the last week or two, increasingly seemed to have been a position that they were taking for political reasons. >> okay. well we'll only avoid a default if you can get the votes to get it through. speaker mccarthy predicted he can get a majority of republicans, some democrats he thinks will vote for alsohing d

st lot democrats that will vote for it too. right now the democrats are very upset. the one thing told me hakeem, there's not one thing in the bill for them, not one thing in the bill for democrats. >> did you say that and how do you convince democrats? >> i have no idea what he's talking about particularly, because i have not been able to review the actual legislative texts. all that we've reached is is an agreement in principle -- >> du talk to him? >> i talked to him yesterday afternoon. >> okay. >> what i haven't talked to him since that point in time. what i have consistently said, however, privately and publicly, was that the extreme maga republican negotiating position and that, dream bill that they've passed on april 26th, the default on america act, contained nothing that was consistent with democratic values or american values. it was unreasonable to think that that negotiating position

is going to be able to result in a resolution that would make sense for the american people when he understood and everyone understood that a bipartisan resolution was the only way forward to avoid a catastrophic default. >> that's a bill that is going nowhere. in terms of the one that was or is being written as we speak, the head of the progressive caucus pramila jayapal said this morning you need to worry about the left flank of the party. she has 102 members in that caucus. how many democratic defections do you expect? >> well, i've had several conversations with pramila jayapal over the last several days and will continue to do so and expect that she will be part of the caucus briefing that takes place later on today. here's what i can say, is that the agreement that was reached in principle by president biden, does several important things. in addition to avoiding a devastating default that would

hurt everyday americans, it protects social security, it protects medicare, it protects medicaid, protects veterans -- >> she's concerned about environmental policy change -- >> hold on -- >> and food stamps. >> hold on. i'll goat that. it protects the american people from the types of devastating spending cuts that were proposed by republicans in their default on america act. those are incredibly significant steps forward. now in terms of the permitting issue. i haven't had the opportunity, nor have any of us had the opportunity, to review what the proposed language may ultimately be in terms of the permitting situation. in terms of snap, as i understand it, and again, we'll have the opportunity to review that language in a few hours when it is released, but as i understand it, it will actually result in an expansion of eligibility for people like

beca c madeo pts a relt of what will be in this agreement in terms of the original 1996 law that was passed. >> according to the white house, it's going to relax work requirements for veterans and homeless people but still pushes up the age to 54, from 49. are you implying -- do you mean to say here the white house hasn't kept you fully briefed on the details? >> the white house has, of course, kept all of us fully briefed. >> okay. >> every step of the way. however, i do think that as the white house has indicated, this is only an agreement in principle. >> right. >> that will not be a final agreement until we all are able to review the actual legislative texts. >> the white house is still calling this a budget deal and separate debt limit increase, but mccarthy says it's a 150-page bill and not a clean debt ceiling increase, is this one vote, one bill? >> that remains to be seen and ultimately that's a decision that house republicans have as

their prerogative to make. >> yeah. >> i do hope and expect to see a significant number of house republicans voting for this agreement. it's my understanding that they are committed to producing at least 150 votes, if not more. they were the ones who negotiated this agreement with the white house. and i expect that they will provide a significant number of votes to get it over the finish line. >> okay. 150 republicans. you need something in the range of 70 democrats? you think you have that? >> well, i do expect that there will be democratic support. once we have the ability to actually be fully briefed by the white house, but i'm not going to predict what those numbers may ultimately look like. we have to go through a process consistent with respecting every single member of the house of representatives and their ability to fully understand the resolution that has been reached. >> okay. well, jim headlinz of connectic e' therket rctioonef u wan ee.

youiver a vote, can you deliver someone like him, deliver a vote that wins on the first try? he's talking about a market crash. >> well we have to, of course, avoid a market crash. we have to avoid tanking the economy and avoid a default. the reason we're in this situation from the beginning is extreme maga republicans made the determination that they were going to use the possibility of default to hold the economy and everyday americans hostage. >> understood but that's where we are right now. that negotiation happened. >> that's right. >> you negotiated with them. >> here we are. >> right. >> and that's why i'm thankful that president biden has reached a resolution and that's also why i'm thankful that notwithstanding the fact that they were trying to jam ten-year spending caps down the throat of theri p we were ab mch up a frn

with 2023 levels -- >> well -- >> 2023 levels, not the 2022 levels that they were trying to extract. >> there's some disagreement -- >> make sure we avoided a catastrophic default. there's disagreement on those, but we don't have the text. i want to ask about the backup plan. 213 democrats voted for the discharge petition, idea of being able to vote to lift the debt ceiling even if republicans -- if the republican leader doesn't do it. you would need five republicans. can you do that? can you guarantee people that we will in the see a default? >> yes. >> all right. hakeem jeffries, glad to have you with us. hopefully we see you here in person next time. we have a lot of work ahead in congress and also on the democratic side. the republican side of the aisle. that's where we're turning to arkansas republican congressman french hill who joins us from little rock. good morning to you, sir margar

you. >> let's pick up where we left off. the leader says 150 republican votes can be delivered by the gop. do you have those votes for this deal? >> i feel confident that we'll have those votes after people review the text, talk with their colleagues, compare it to our goals. speaker mccarthy is the only person who demonstrated urgency on this point starting when he was sworn in and starting with the first meeting with president biden to get to a sensible and responsible increase to the debt ceiling. he had two red lines, margaret. no tax increase and not a clean debt ceiling and i think he's achieved that. >> one bill, one vote? >> that's my view. >> okay. that decision has been made, it sounds like, based on what you're indicating here. in terms of the votes, though, you still have to be able to deliver those 150 republicans to vote this through. hakeem jeffries says he can get

the democrats in line. we'll see. can you guarantee that this vote will happen and will succeed on first try? >> i believe it will. i'll tell you why. we had our plan, which we passed, as you noted on april 26th, with the full support of the american people to stop the avalanche of spending and each component we had of limiting the rate of growth, limiting the amount of spending -- >> that's past tense. i don't want to talk about past tense we're talking about the deal that's brokered. i want to talk about whether you can deliver that on wednesday. this wednesday is when the speaker says the vote will happen on this tentative agreement. >> okay. well my point is, that it's not past tense. each of the components we had in the bill on the 26th is reflected in this negotiated deal in principle that the speaker achieved with president biden. and that's why i believe that we'll have those votes on wednesday because we limit the rate of growth, we cut spending, we claw back unneeded spending

and recessions. we stop unnecessary spending and get our economy growing with regulatory relief, encouraging more people back to work. >> okay. well, chip roy and others from the freedom caucus said they don't want to see the vote happen and they will try to block it. >> okay. they need to read the text and visit with their colleagues. >> have you read it? we haven't. >> no. i'm going to read it this afternoon when it's posted on the house website. >> okay. so in terms of what is being drafted, there's differences here in terms of spending freezes and which year we're comparing it to. the spend from the republicans and democrats is very different on this. what is actually going into the text? >> well, we're going to limit the rate of spending growth for nondefense, nonveteran spending. it will be an fy '22 levels. defense and veterans at fy '23

levels, we cap the growth rate in spending 1% a year for six years. that was a key component in the april 26th bill when we offered 1% of growth for ten years. we also are going to go to a approach on appropriation bills which finally opens up and gives strength to the appropriations process that if all 12 bills are to the passed by september 30th, we go to a continuing resolution that 99% of current year spending levels. that's an immense incentive for congress to do its work and pass all 12 bills in the house and senate. >> okay. >> that's the spending issue. we claw back, as you noted, covid relief money, other recessions. stop the first year increase in the irs budget, nearly 2 dlfb spending stopped, of that $80 billion to be spent over 10 years for hiring irs agents. >> well we will wait to see that text as well. i want to get to what you were

talking about in terms of freezes. every american knows your dollar a problemor you in the senateubcan senator lindsey graham criticizing this deal and the defense increase as you referred to it, because it doesn't keep up with inflation. how do you sell that? because he just -- he said that national security threats are increasing and this is a disaster for the navy and a win for china and putin. how do you respond to that? >> well, first, i think that's why speaker mccarthy and president biden agreed to the $888 billion spending level which was the president's level plus 3% inflation was exactly that point contained in this negotiated deal. i also would say look, we've had a gross overreaction in fiscal and monetary policy since the pandemic and that's why republicans are trying to slow the growth in spending and get

back to normal before the pandemic and all areas will have to sacrifice. look, the speaker and the president agree, we want to preserve defense, preserve veterans, and take social security and medicare off the table. those are big chunks of the federal budget. >> well, this has to make it through the house and then through the straight, so it sounds like there's still a lot of convincing you need to do on those points you laid out. are you worried that the scope of this isn't big enough for you to then go back and sell to some skeptical members of your caucus who wanted to see bigger reductions? >> well, i'm one of those people that wanted bigger reductions, but i also recognize we control only the house of representatives. we've got to get it through the straight as you note and the biden administration controls the central government here. if they were so concerned about the debt ceiling, they could have negotiated with mccarthy a lot earlier or they could have raised the debt ceiling when they controlled both branches of the house and senate and the federal government in december,

but they didn't. this is the world we have. it's not the spending cuts i would prefer. but when you look at pay go on regulatory costs that's a big change. when you look at the massy note on 99% cr on appropriation, that's a big change. so i think we're in the absolute right direction, and it absolutely follows the goals of house republicans laid out on april 26th. >> all right. congressman, thank you very much for coming on, giving us a glimpse into what republicans are putting on paper right now. "face the nation" will be back in a minute. stay with us. to help you connect and analyze data— from hvacs to elevators to lights. what if we use ai-driven insights to pinpoint inefficiency? yep. and act on it. saving energy, money... ... and emissions. yup. that's a big one. now you've built something better for everyone. that's the sustainability solution ibm and a global real estate company created. what will you create?

ibm. let's create. as someone living with type 2 diabetes, i want to keep it real and talk about some risks. with type 2 diabetes you have up to 4 times greater risk of stroke, heart attack, or death. even at your a1c goal, you're still at risk ...which if ignored could bring you here... ...may put you in one of those... ...or even worse. too much? that's the point. get real about your risks and do something about it. talk to your health care provider about ways to lower your risk of stroke, heart attack, or death. learn more at getrealaboutdiabetes.com we go now to austan gollsbee the current president of the federal bank of chicago and a former white house economic adviser in the obama administration. it's good to talk to you. i know you were chairman of president obama's council of economic advisors when we came to the brink back in 2011. markets are closed tomorrow but we are still very close to the

default deadline. how dangerous is the territory we're in, even with this tentative deal? >> it's definitely a little dangerous. you know, as chair powell has stated from the beginning, we must raise the debt ceiling. now the fiscal decisions, of course, are between congress and the president and however they sort it out is good by us, but if you did not do that, the consequences for the financial system and for the broader economy would be extremely negative. >> how important is it that this vote succeeded on the first try? >> like i say, this is a fiscal decision left to congress and the president, so it wouldn't be the place for anybody from the fed to be saying what they should pass or how they should vote. >> yeah. >> but, you know, i liken it to there's legitimate argument if you're trying to lose weight, you know, what can you eat and

how much exercise. everybody should be able to agree that first strategy should not be cutting off your toe. that doesn't save much weight and it's really painful and that's kind of where the debt ceiling is. >> well, treasury secretary yellen said it's already kind of painful because she's already seeing borrowing costs and that go up and that there is a cost to being in this place of brinksmanship. what is -- can you in any way quantify what the impact is to the economy being in the place we are? >> look, margaret, you raise a great point that even the anticipation of these problems does have consequences on the economy and does have consequences on financial markets. in a way this couldn't be happening at a worse time, so i'm definitely heartened you saw both parties there on the program expressing confidence that they're going to be able to raise the debt ceiling and --

because if you just look at what's happening to the rates, you already see that there's fear and uncertainty, but there are multiple steps that can get worse. so if you have banks already on edge because of the financial and banking stresses that we've seen over the last couple months, taking the safest asset on anyone's balance sheet which is u.s. treasuries and kind of calling it into question, is not good for the banking system and not good for lending and the real economy, and you'll start to get into other problems like if the rating agencies downgrade u.s. treasuries again, then that could raise the interest rates we have to pay even more, and you get into secondary problems like insurance companies that aren't allowed to hold things whose rating isn't high enough. so let's just avoid it. let's raise the debt ceiling and get on to the next thing. >> right.

i understand you're in a different role now at the fed than you were back then, but this is a complicated economic environment we're in. can you say at this point -- i know you haven't seen the text, no one has -- what this will do to the fight against inflation and some of the choices you will have to make at the fed? >> well, look, as i say, raising the debt ceiling and decisions about the budget have -- that's none of the fed's business. the law gives the fed two jobs. maximize employment, stabilize prices. we've done very well on the employment side. we're improving on the inflation side, but we have not succeeded. inflation is still well higher than where we want it to be. so at a moment of banking crisis, it will be a great relief if we raise the debt ceiling and go back to dealing with the matters at hand, which are the real economy side of employment and inflation.

>> do you have a sense yet of whether you personally want to raise interest rates again at the flex next june meeting? >> as a voting member of the fomc i try not to make it a point to prejudge and make decisions when you're still weeks out from the meeting, and we're going to get a lot of important data between now and then. i think the part that makes this job difficult is you got two simple goals, but the actions that the fed takes, take months or even years to work their way through the system. so the fed has raised the interest rate by five full percentage points over the past year. that's the fastest increase in decades, rivalling ever, and some part of that still has to work its way through the system. >> yeah. >> so there's no doubt inflation is too high still.

it has come down. and we're just trying to manage, can we get inflation down without starting a recession? there are people who say we cannot. but i think that we can. and that's for sure the goal. >> all right. president goolsbee, thank you for your time and we'll be right back with a lot more "face the nation." stay with us. m. phil: excuse me? hillary: that wasn't me. narrator: said hillary, who's only taken 347 steps today. 348, 349... hillary: i cycled here. narrator: haha! on an e-bike... speaking of cycles, mary's period is due to start in three days. mary: it is? narrator: and her friend hasn't washed his hands since... monday! yeah, i'd put that back. and then there's bill, whose heart rate rises to 115, nervous i'll mention... bill: my diarrhea? narrator: his chronic night sweats. linda: you sweat more at night than you do at the gym. narrator: which is rich coming from linda, who's wearing yoga pants but never does yoga! linda: i stretch! bill: how do you know so much about us!? phil: i don't like it... narrator: it's your health data, you've been sharing it without realizing it.

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this is the "cbs overnight news." after days of negotiations and late-night conversations to increase the country's $31.4 trillion debt limit, tonight there appears to be a bipartisan relief. the president and republican leadership now have a tentative agreement to head off a potential default on government loans. however, there are still many hurdles in the way as we await the text of that bill. before president biden can sign the deal it must first pass the house, then the senate. today majority leader chuck schumer put senators on notice that a vote could come as early as next weekend.

before the june